What This Strategy Does
Bluechip Funding Arb captures funding rate spreads between supported perp DEXes. The strategy goes long on one exchange and short on the same asset on another exchange, collecting the difference in funding payments. The net position is delta-neutral: the strategy has no directional exposure to the underlying asset. When funding rates diverge across exchanges, one side pays and the other receives. The strategy sits on the receiving side of both legs by choosing which exchange to be long and which to be short. As rates shift, the strategy rebalances to stay on the profitable side of each spread. Example. BTC-PERP funding is +0.01% on Exchange A and -0.005% on Exchange B. The strategy shorts on A (collects 0.01%) and longs on B (collects 0.005%). The spread: 0.015% per funding interval, earned on the full notional. No BTC price risk.How It Earns Points
Each supported perp DEX awards points based on open interest. Because this strategy holds positions on multiple exchanges simultaneously, it generates points on every exchange where it has OI. A funding arb position requires two legs, long and short, on two different exchanges. Both legs carry open interest. Both legs earn points. This means funding arb earns roughly twice the points per dollar of vault capital compared to a single-leg directional strategy. The strategy’s credit rate reflects aggregate OI across all exchanges. More capital in the vault means larger positions, more OI, and faster credit accrual for EPT holders.What EPT Holders Care About
EPT holders are buying a claim on the points this strategy generates. The key variables:| Factor | Why It Matters |
|---|---|
| Open interest levels | More OI across exchanges means more points generated per unit of time. OI drives the credit rate. |
| Number of exchanges | Each exchange where the strategy holds OI produces its own points stream. More exchanges, more EPT instances. |
| Epoch duration | Longer epochs (8-12 weeks) give more time to accumulate credits. Depositing early maximizes your credit share. |
| Expected points value | The eventual value of exchange points at TGE determines what your EPT is ultimately worth. |
What ST Holders Care About
ST holders own a claim on the strategy’s USDC value at maturity. For a funding arb strategy, the key variables:| Factor | Why It Matters |
|---|---|
| Funding rate environment | Positive spreads mean the vault earns. Compressed or inverted spreads mean the vault earns less or loses. |
| Historical PnL | Past NAV trajectory shows how the strategy performs across different funding environments. |
| NAV trajectory | A steadily rising NAV means consistent funding income. Flat or declining NAV signals unfavorable conditions. |
| ST discount | Buying ST below NAV on the ST/USDC orderbook locks in a discount that becomes yield at redemption. |
Risk Profile
Bluechip Funding Arb is a low-risk, delta-neutral strategy. The main risks:| Risk | Description |
|---|---|
| Funding rate reversal | The spread between exchanges compresses or inverts. The strategy may earn less than expected, or briefly pay net funding. This is the primary risk. |
| Exchange risk | Positions are held on third-party perp DEXes. Smart contract risk, downtime, or liquidity issues on any exchange affect the strategy. |
| Settlement risk | Cross-exchange settlement during epoch maturity may be delayed. Capital is returned during the 1-2 day unwind period. |
| Rebalancing friction | When the strategy rotates legs between exchanges, there may be brief periods of imperfect hedging or slippage costs. |