"bro wat is solstice?"
An explanation of @solsticefi, in (very) simple terms. đ§”
"yea??"
Solstice is an institutional-grade DeFi protocol built around a synthetic stablecoin (USX) and a yield-bearing liquid staking token (eUSX).
USX is fully collateralized and pegged to the USD. eUSX yield comes from funding rate arbitrage and hedged staking strategies.
"huh?"
Letâs start with USX. Itâs a fully collateralized synthetic stablecoin pegged to the USD.
Sounds full of buzzwords but itâs simpler than it looks.
"ok but tell me now"
Put simply, itâs a representation of a dollar. It's always worth $1 and backed by more than $1 at any time.
Like USDai, USDe and other synthetic stablecoins that popped up the last few years.
"ic and eusx?"
eUSX is the yield-bearing version of USX.
In dumb words, it's USX but that makes you money.
"oki, how?"
Two sources: funding rate arbitrage and hedged staking strategies.
The common point? No market exposure. So prices going up or down donât matter, they make money.
"bro shut up and explain both"
Funding rate arbitrage is taking advantage of funding differences between perp markets. Yea we have a thousands now.
So, you long SOL on Hyperliquid and pay 5%/y and short it on Lighter where you are paid 20%/y. Congrats you are making 15%/y.
"and the other?"
Hedged staking strategies means staking an asset while short it at the same time. So you don't care if price move.
You get money from the staking yield minus the funding to short it.
With those strategies, Solstice APY was around 15.4% for the last 12 months
"tldr?"
Solstice is a DeFi protocol built around two assets:
USX â a fully backed stablecoin always worth $1
eUSX â the yield bearing version of USX that earns passive yield from market-neutral strategies
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