Delta-neutral stablecoin yield using perp funding rates
Hold spot ETH, short an equivalent ETH perpetual, collect the funding-rate spread in USDC. Boring by design, not a moonshot.
How it works
When crypto is bullish, perpetual futures traders pay a funding rate to shorts every 8 hours. Holding spot ETH and shorting the same size perp cancels price exposure and turns funding into a stablecoin yield. Historically 8-20% APY, sometimes negative for short stretches.
Step by step
- 1Only use money you can lock up for 12 months and afford to lose. This is not a savings account.
- 2Open accounts on one CEX (Binance, Bybit or OKX) and one on-chain venue (Hyperliquid or Drift). Complete KYC where required.
- 3Fund $5-20k in USDC to start. Below $5k, fees eat the yield.
- 4Buy spot ETH for exactly half the total capital. Move the other half to the perp account as margin.
- 5Open a short ETH perpetual at 1x leverage matching your spot size to the dollar. Confirm delta is within 1% of zero.
- 6Set a maintenance-margin alert at 200% of liquidation price. Never run margin below 40% utilization.
- 7Every 8 hours, funding auto-settles. Sweep accumulated funding to a separate stablecoin wallet weekly to bank the yield.
- 8Rebalance whenever spot vs. perp size drifts more than 3% (usually after big price moves). Set a Sunday-morning reminder.
- 9Track historical funding on CoinGlass. When 7-day average funding turns negative for 10+ days, unwind and park in a Treasury-backed stablecoin fund (Ondo, Mountain).
- 10Report every trade for taxes. Use CoinTracker or Koinly from day one — reconstructing later is painful.
Discussion
Been running this 18 months. The unglamorous part is rebalancing discipline — miss a week during a rally and you're suddenly short-biased.
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