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Hedger Liquidity example
Case study, the first LP (Hedger) on SYMM.
A private proprietary trading firm called "Rasa Group A.G. acting as Rasa Capital" was established through a collaborative effort between the SYMMIO team members and representatives from the inaugural brokerage firm that joined SYMMIO as a liquidity provider.
The first hedger achieved an average APR of 250% on their stablecoin deposits in the first month of testing, providing liquidity https://cloverfield.exchange and being a counterparty to all trades that happened.
Using our current system, providing liquidity for FTM future markets on SYMM IO Finance is 37,700% more capital efficient than providing liquidity on https://gainsnetwork.io/ via their DAI vaults. To provide context, here is how we arrived at those values:
- Current SYMMIO LP(Rasa the hedger) deposits: $38,540
- Current maximum open interest available to long FTM on SYMM IO: $370,800
- Current Gains LP(Vault) deposits: $38,952,373
- Current maximum open interest available to long FTM on Gains: $1,000,000
= 377.919x efficiency. Increased efficiency means higher returns for you as a Liquidity Provider.
On March 17th, we launched the closed beta of SYMMIO and enforced strong hard caps. Initially, users could only deposit up to $100. The maximum deposit is $1000, and open interest is capped at around $50,000. Presently, it is capped at $221,000 (data can be obtained from the Cloverfield website). The first hedger (Rasa Capital) made the following deposits:
- On our Binance account to hedge:
- 17/03/2023: $2,000.00
- 09/03/2023: $5,000.00
- 04/04/2023: $10,000.00
- 17/03/2023: $18,000
- 15/04/2023: $10,000
- 16/04/2023: $13,000
In total, we deposited $56,000.00. Our total profits after one month were $8,466.28, resulting in an average APR of 252.80%. These profits were earned while being purely in stablecoins or delta-neutral trading positions.
Calculated Risks that are involved:
- 1.Smart contract failure on the SYMMIO contract side. (audits are currently undergoing).
- 2.Counterparty risk on Binance (the first hedger is using Binance custody solution CEFFU, but the risk could be further mitigated by using a more diverse set of exchanges and otc desks)
- 3.The Trading system that scans the chain for new requests, streams data to frontends, and opens delta-neutral positions on Binance can fail. (These systems can be developed and maintained by the liquidity provider, allowing for reasonable self-tailored security measures to be taken, we can help with the setup by providing guidance and the experience we already gathered.)
The software to automate counter trading and hedging run by RASA Capital will not be provided.