Rage Trade, a protocol built on the Arbitrum blockchain, has launched its Delta Neutral GLP vaults. These vaults are built using the GMX protocol and are designed to provide users with a way to hedge their positions in the market. In essence, the protocol helps users reduce risk and improve the stability of their investment portfolios. But what is Rage Trade?
What is Rage Trade?
Rage Trade is a decentralized trading protocol that allows users to trade ETH perpetuals. The protocol uses a 10x leverage system. This leverage system allows investors and traders to be able to enter into trades with a small amount of capital, and potentially realize larger returns. Additionally, Rage Trade also focuses on building liquidity and composability into its platform, meaning it is designed to allow traders to easily buy and sell assets and to connect with other protocols and platforms in a stress-free and efficient way.
Key Features of Rage Trade
Delta Neutral Vault
Rage Trade’s Delta Neutral Vaults are developed to enable users to provide liquidity on GMX while earning ETH rewards, this is done in a method that minimizes exposure to ETH and BTC. To accomplish this, the vault performs on-chain and employs a strategy of two separate risk vaults to perform a short on Aave and Uniswap.
It is noteworthy to know, as a liquidity provider, that providing liquidity in high APR pools can often involve temporary loss. This is caused by exposure to non-stable assets. A method to mitigate this risk is to use a hedging strategy, such as shorting, to offset any potential losses. By opening a short position, one can effectively hedge exposure, so that any temporary loss or gain will be matched by profits or losses on the short. This makes your net position so-called ‘delta neutral’.
The Risk-Off Vault is a low-risk vault that enables users to deposit USDC and earn a leveraged yield by lending it to the Risk-On Vault. It is developed to provide a stable and secure way for users to earn returns on their USDC, the same time, minimizing their risk exposure.
One of the major features of the Risk-Off Vault is its ability to earn the returns that could be earned by lending USDC on the Aave platform. Also, the Risk-Off Vault earns a portion of ETH rewards from GMX based on the utilization ratio, which further increases its yield.
The Risk-Off Vault works in conjunction with the Risk-On Vault, which uses the USDC provided by the Risk-Off Vault to short the ETH and BTC exposure in GLP with an expected APY of 6-8%.
The Risk-On Vault on the alternate end is a high-yield vault that enables users to earn returns on their GMX liquidity while canceling the price exposure of ETH and BTC. It operates by taking an ETH and BTC flash loan on Balancer and employing this capital to short ETH and BTC on UNI v3. It then deposits the resulting USDC on Aave and creates a short position by borrowing ETH and BTC against this collateral.
A key feature of the Risk-On Vault is its capacity to update the open shortly on every rebalance. This makes sure the vault remains delta neutral and minimizes exposure to price fluctuations. It also allows it to offer higher APYs of 15-25% compared to other vaults, making it a potentially attractive option for users looking to maximize their returns.
Trading on Rage Trade
Trading on Rage Trade requires you to connect your wallet like any other DEX. Once this is done, you can start trading dollar-margined positions with up to 10x leverage.
A major benefit of trading on Rage Trade is the platform allows you to withdraw and trade with unrealized PnL. This means that you can take profits or cut losses before a trade is settled, providing greater flexibility and control over your trades.
As a liquidity provider (LP) on Rage Trade, you have the opportunity to provide liquidity to omnichain liquidity used in different Layer Zero protocols. These protocols enable LPs to pool their funds in the Delta Neutral Vaults. These vaults in turn enable users to provide liquidity on GMX in a delta-neutral way while earning ETH rewards. The addition of these vaults is expected to attract a significant amount of liquidity, which can further increase the yield for LPs.
In addition to participating in the Delta Neutral Vaults, LPs can also recycle their liquidity into Rage’s ETH perpetual contract. This allows them to continue earning rewards and potentially increase their overall returns. Overall, Rage Trade offers a range of options for LPs looking to maximize their yields and take advantage of the DeFi market.
Overall, Rage Trade can be a valuable opportunity for users to earn additional returns on their investments and maximize their returns in the DeFi market. Be sure to keep an eye out for updates and announcements about the airdrop!
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