Copyright © 2025 RIMU Group LLC
Rimu always takes a delta-neutral approach that attempts to minimise or eliminate risk to underlying prices. Rimu diversifies across strategies in order to reduce the risk of constrained liquidity on any one platform or set of correlated assets.
Rimu's proprietary, continuous risk management strives first and foremost for the preservation of capital and can still take advantage of significant yields.
Together, these strategies have historically provided greater than 20% APY (and often much more) with significantly reduced drawdown risk as compared to other investments.
Yield arbitrage seeks to generate returns by exploiting differences in interest rates or yields across various platforms or assets. In practice, this means the hedge fund may borrow one stablecoin, such as USDC, at a lower interest rate from a lending platform, and simultaneously invest those funds into another stablecoin, such as USDT, on a different platform offering a higher yield. By carefully managing both sides of the trade, the fund captures the spread between the borrowing and lending rates, while remaining insulated from price fluctuations in the underlying assets.
Basis trading involves profiting from the price difference between a cryptocurrency’s spot price and its futures price, while remaining delta-neutral. For instance, the fund might buy BTC (Bitcoin) on the spot market and simultaneously sell an equivalent amount of BTC futures contracts. This locks in the difference (the “basis”) between the two prices, regardless of whether BTC’s price rises or falls.
Sometimes called a staked basis trade, hedged staking combines earning staking rewards from proof-of-stake cryptocurrencies with a simultaneous hedge to eliminate price risk and itself generate funding . For example, the fund may stake ETH (Ethereum) to earn staking yields while at the same time taking a short position in ETH perpetual futures contracts. This short position not only offsets any price movements in ETH, neutralising market exposure, but also typically generates additional revenue through positive funding rates paid to short sellers on many futures exchanges. As a result, investors benefit from both the staking rewards and the funding rate income, while being protected from the volatility of the underlying crypto asset, ensuring a stable, market-neutral return.
Yield-bearing tokens can be split into principal and yield components. The fund can purchase principal tokens (PTs) representing the fixed value of assets like stETH (staked Ethereum) or at a discount, locking in a fixed return at maturity. By holding only the principal token and not the yield token, the fund secures a predictable, delta-neutral return, independent of future interest rate changes or market volatility, providing investors with stable and transparent yield opportunities.
Participating in liquidity pools allows the fund to earn fees and rewards by providing pairs of assets to decentralized exchanges, such as Uniswap or Curve. To maintain a delta-neutral position, the fund may hedge any price exposure by taking offsetting positions in the underlying assets. For example, by providing liquidity to the USDC/ETH pool on Uniswap and hedging any residual risk, the fund can earn trading fees and incentives while minimising exposure to price fluctuations, ensuring a stable, market-neutral yield.
The JLP Pool, or Jupiter Liquidity Provider Pool, allows investors to earn fees and rewards by providing liquidity to a diversified basket of assets, such as SOL (Solana), ETH (Ethereum), and WBTC (Wrapped Bitcoin), on the Jupiter platform. To maintain a delta-neutral position and eliminate exposure to price fluctuations of these underlying assets, the fund continuously manages short positions in SOL, ETH, and WBTC perpetual futures. By dynamically adjusting these hedges to match the pool’s asset composition, the fund captures the yield and incentives generated by the JLP Pool while neutralising market risk.
Vault lending is a delta-neutral strategy that involves allocating capital to a decentralized lending platform. The fund carefully selects or curates vaults that offer attractive, risk-adjusted yields by lending assets such as USDC (USD Coin), USDT (Tether), or DAI (Dai Stablecoin) to reputable markets. This approach allows investors to benefit from the interest income generated by the vaults, while the fund’s due diligence and ongoing monitoring help manage credit and protocol risks, providing safety in the yield opportunities.
Appropriately leveraging some of the strategies above, a looping strategy, also known as recursive lending, involves repeatedly borrowing and lending the same asset to amplify yield while maintaining a delta-neutral stance. For example, the fund might deposit USDT as collateral on a lending platform like Aave, borrow USDC against it, and then redeposit the borrowed USDC to borrow more USDT, repeating the process multiple times. By carefully managing collateral and borrowing limits, the fund can enhance returns from interest rate differentials without taking on significant price risk.
Copyright © 2025 RIMU Group LLC