📈STRATEGY

Pseudo-delta-neutral GLP strategy: GEM FINANCE single-stake vaults use what we call a pseudo-delta-neutral strategy, meaning single-stake assets ($USDC, $ETH, or $BTC) will be allocated and adjusted to the same weight as GLP’s composition. These assets will be used to mint $GLP and earn yields from $GLP yields. As the market moves, the vault’s exposure to these assets are hedged against GLP’s volatility as they both have the same composition. The composition will be rebalanced weekly by the protocol following market movement to ensure hedge parameters. For example, if GLP consists of about 50% stables, 33% ETH and 17% BTC, a vault of $1,000,000 in asset value will consist precisely of $500,000 USDC, $330,000 worth of ETH and $170,000 worth of BTC. This would satisfy our pseudo-delta-neutrality condition.