Neutra Finance – Solve the “headache” when providing liquidity to GLP on GMX.
As you know, GMX was a prominent project in the bear market last year, generating great interest and support from the Arbitrum community, GMX’s TVL itself accounted for nearly half of Arbitrum’s TVL, showing its success. work of GMX. GMX is so hot that Binance has to actively list GMX on Binance.
Thanks to this huge trading volume and revenue, GLP liquidity providers receive a pretty attractive APR, even during a market downturn: 20% – 50%/year.
However, there is a risk when adding liquidity to GLP, which is the price movement of BTC, ETH, UNI, LINK, etc.
We all know that we are in the crypto cold period, these coins can completely continue to fall deeply. That means that while it is possible to profit from sales and lose traders, if the price of these coins falls deeply, it may turn into a loss, not a profit.
And that’s why Neutra Finance was born, helping GLP liquidators not only have less capital impact, but also help them earn higher APR by earning more NEU and esNEU, through Delta Neutral.
So what is NeuTra Finance? Find your answer below.
Neutra Finance can be considered as a hedge fund tool through Delta Neutral strategies automatically, normally hedge fund techniques are difficult techniques, must be experts with new powerful tools. strategies can be implemented. Neutra Finance aspires to create a simple, effective and accessible hedge fund tool for even ordinary users.
When investors deposit their funds into Neutra’s Vault, users can get higher APRs on DeFi products (like GMX, deposit GLP in Neutra’s vault and receive back nGLP), while the strategies are automated. of Neutra will do the rest, such as profit optimization, rebalancing and liquidation risk management.
nGLP vault essentially allows users to earn a higher APR than depositing regular GLP, while users are protected against price fluctuations caused by market fluctuations.
SOME FEATURES OF NEUTRA FINANCE
REDUCE RISK BY BUILDING ON GMX 100%
All operations (buy GLP, sell ETH/BTC) are performed within the GMX protocol, reducing smart contract risk compared to other Delta Neutral solutions using multiple protocols.
MAXIMIZING CAPITAL EFFICIENCY, ALLOWING HIGHER APR
Using leveraged derivatives trading allows Neutra Finance to have more money to buy GLP, thus earning more yield, hence a higher APR. Currently, Neutra Finance uses a target leverage of 5~6x, allowing Neutra Finance to use 90% of the deposit to buy GLP.
OPTIMIZATION ALGORITHM-BASE REBALANCING
Neutra Finance’s rebalancing mechanism aims to provide the optimal rebalancing timing in line with the neutral strategy for a Delta Neutral.
Neutra Finance uses its unique Average True Range (ATR) algorithm to analyze recent price data and predict the price movement of each asset class. This allows Neutra Finance to react effectively to market movements and make cuts before sharp fluctuations, while reducing unnecessary transaction costs and adding an extra layer of protection against price fluctuations.
To be updated
Neutra Finance’s tokenomics is largely composed of NEU and esNEU (escrowed NEU).
NEU is the utility and governance token of Neutra Finance.
By staking NEU, users will earn
- Protocol fees in stablecoins (currently DAI)
- Escrowed NEU (esNEU)
- Fee Boosters
Protocol fees are collected from our strategy vaults, consisting of Management Fee (2% of TVL yearly) and Performance Fee (20% of APR). 50% of the fees is allocated to cover operational expenses and 50% is distributed as fee rewards to token stakers.
Keep reading for more details on esNEU and Fee Boosters!
esNEU is distributed to NEU token stakers and strategy vault participants.
esNEU is non-liquid, non-transferrable NEU that can be used in two ways:
- 1.Staked to receive the same rewards as a regular NEU token (fees, esNEU, Fee Boosters)
- 2.Vested for 12 months to become actual NEU tokens
$NEU has a total supply of 6 million, with the following allocation:
- 10% Public: Of the public allocation, 40% will be used to seed POL for $NEU, 30% will be distributed to core contributors, and 30% will be allocated to the Treasury.
- 35% esNEU reward: The esNEU reward is distributed to token stakers. This NEU is not liquid as it must be locked for a year. Emissions will have an annual maximum cap of 2% of total $NEU supply and may be subject to change. (It is very unlikely that all 35% will become NEU if users stake or choose not to vest.)
- 3% Advisor: This allocation will be used to compensate advisors for their contributions to the project and will have a 36 months linear vesting period.
- 37% Treasury: The treasury allocation will be used for POL, marketing, future audits, community rewards, and operation.
- 10% Core contributors: This allocation will be distributed to the core contributors of Neutra Finance and will be linearly vested for 24 months.
- 5% Partnership: This allocation will be used to establish strategic partnerships and collaborations that benefit the Neutra Finance ecosystem and will have a 36 months linear vesting period.
Looking at Top Balances, we could see the amount of Smart Money Wallet is increasing recently. This is also a signal for the accumulating activity. Besides, Arbitrum network is expected to released mainnet on Q1/Q2 2023, so users are expecting for a Arbitrum Season and growth of Neutra Finance.
What is Smart Money? Read more about Nansen – Powerful Cash Flow Tracker
From the perspective of MM, we see there are 2 cases of price increase as shown:
- Green: Just finished wave 1 and is doing 2 adjustments
- White: Finished wave 3 and is going 4
Arbitrum Season is expected to come. A lot of projects are being strongly developed in this potential network and Neutra Finance is one of them. However, as my usual advice, please be careful and protect your fund. Everything contains risk and you guys need to have an effective fund management and allocation.
Andrew – Barmy Team