As DeFi yields compress, Neutrl’s delta-neutral strategy delivers ~30% APY by combining OTC arbitrage, liquid basis and staking, sustaining returns in all market conditions.

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TLDR:

• DeFi yields are compressing: double-digit rates were short lived and are now mostly in the 4–8% range, forcing farmers toward higher-risk looping strategies to get similar returns.
• Underlying fragility: yields tied to liquid basis, MEV arb, staking, and lending are only as strong as demand for trading activity, and borrower leverage. This increases in pockets but quickly becomes muted.
• Neutrl’s differentiated model is delivering ~30% delta-neutral APY in private beta: market-neutral by design, the strategy performs in bear, bull, and stagnant markets, making it resilient and adaptable built on real trading yield from buying the Top 100 tokens at wholesale discount in private markets and shorting perpetuals across multiple venues, capturing funding rates and staking yield on underlying collateral
• Sustainable edge: Neutrl’s yields are structurally independent of market conditions, as funding rates are a much smaller % of the total yield generated. 20% in OTC arbitrage makes up 50% of yield contribution. Neutrl leverages first-mover advantage and the best OTC supply channels to bring this untapped alpha onchain.

Yields across DeFi have compressed hard over the past month. Spark’s USDS farm rate is down from 8% to 6.5% today; sUSDe has slipped from 16% to 7.5%, HLP is now 8%. Even liquid basis funding rates on Hyperliquid have reset dramatically over the last month - Fartcoin leverage liquid basis (a delta neutral fund favourite over the past few months) which was at 90% APR is now mid teens.

Neutrl’s trading yield is not reliant on market conditions.

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Neutrl’s yield consists of OTC arbitrage, liquid basis capture like Ethena, staking underlying collateral and yield bearing stables.

OTC arbitrage is the largest driver of Neutrl’s yield, providing stability even when funding rates weaken.

OTC arbitrage profits under all funding rate market conditions. When funding rates are high this is an additional, reliable yield source for Neutrl, boosting returns by capturing profitable perpetual funding across a wider range of altcoin markets. Using USDe as collateral helps capital efficiency and provides a funding rate boost on ByBit.

Under weak or negative funding rate environments Neutrl is able to actively switch its liquid composition into the highest liquid yield across the entire funding rate environment or liquid stables. Over the past 3 months, Neutrl has run liquid basis across multiple tokens, including XRP, Hype, BNB, Pepe, Link, TRX, TON and cross CEX arbitrage. Neutrl is not reliant on any single asset. Furthermore, using USDe as collateral on ByBit allows Neutrl to earn USDe as the base yield and build on top.

Overall even with 80% of the portfolio liquid, funding rate capture still makes up a smaller percentage of Neutrl’s yield as shown above. OTC arbitrage strategies provide a significant margin of safety during prolonged weak or negative funding periods, enabling Neutrl to sustain yield and outperform competitors in down markets.

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gNeutrl.