Funding Rate Spread Buying: the sustainable alpha in Boros
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The Strategy
Long the funding spread. Buy Hyperliquid’s funding, sell Gate’s.
Long Hyperliquid
Higher-funding venue · Boros marketReceive HL floating funding
Pay HL fixed rate
Short Gate
Lower-funding venue · Boros marketReceive Gate fixed rate
Pay Gate floating funding
You receiveRealised spreadHL floating − Gate floating
−You payYour entryHL fixed − Gate fixed
+ Above entry: earn− Below entry: pay
Match notional and maturity. Profit when the average realised spread exceeds entry, after costs.
What’s the edge?
Funding Rate Arbitragers (our counterparties) may accept less than the expected realised spread to lock in their target return. That certainty premium is our potential edge.
A positive sum game
Illustration · not market data · before costsTotal funding rate spread (floating)
Floating HL − Gate
Like Pendle V2: PT chooses certainty; YT takes floating upside and downside. Different mechanics and risks.