> For the complete documentation index, see [llms.txt](https://docs.hyprearn.com/HnETD1HQdaN5QhTwmV4l/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hyprearn.com/HnETD1HQdaN5QhTwmV4l/features/delta-neutral.md).
# Delta Neutral
**Delta Neutral strategy** capture funding yield without directional price risk. HyprEarn opens a **long leg** on one venue and an offsetting **short leg** on another, so the two positions cancel out price exposure while you continue to earn the funding-rate differential between them. Legs are auto-hedged across every major perp DEX, with live hedge health and onchain proof of neutrality.
#### What Are Funding Rates?
On perpetual futures markets, there is no expiry date - so exchanges use a periodic **funding rate** to keep the perp price anchored to the spot price. When more traders are long than short, longs pay shorts; when more are short than long, shorts pay longs. Payments happen every few hours (the interval varies by venue).
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For most traders, funding is a background cost or a small bonus depending on which side they're on. In a delta neutral strategy it becomes the **primary source of yield**: by holding equal and opposite positions simultaneously, price risk cancels out and what remains is the net difference between the funding rate received on one leg and the funding rate paid on the other.
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A positive net funding rate means you are collecting more than you're paying - that's your yield. A negative net rate means the strategy costs you money. Always check the **Net Capture** figure before activating a strategy.
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***
#### How They Work
A delta neutral position is two legs sized to offset each other:
* **Long leg** - profits if price rises.
* **Short leg** - profits if price falls.
Because the legs are equal and opposite, price moves net out to roughly zero. What you keep is the **net funding rate**: the funding you receive on one leg minus the funding you pay on the other. The strategy continuously routes into the highest-volume pair across your two selected venues to tighten execution and maximize funding capture - you choose the infrastructure, the system manages the book.
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**Select two venues (Cross-DEX)**
Pick **DEX 1** and **DEX 2**. The two legs can settle on different chains and even a different wallet (e.g. Hyperliquid vs. Pacifica on Solana).
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**Set market, size and leverage**
Choose the market (e.g. BTC-USDC), commit USDC, and set leverage (kept conservative, e.g. 3x–5x).
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**Set optional PnL exits**
Configure safety and target exits: close if PnL drops below a chosen % (e.g. 5/10/15%), or close when PnL + funding exceeds a target %.
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**Activate**
HyprEarn opens both legs and hedges them automatically. Live positions appear in the Positions / History panel, one row per token with both legs shown.
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***
#### Supported Assets & Venues
Delta neutral routing runs across HyprEarn's multi-DEX network: **Hyperliquid, Lighter (Ethereum), Lighter on Robinhood, Pacifica, Nado, Avantis and Paradex**, using the highest-liquidity perp pair available on each side. Majors such as **BTC-USDC** are the primary markets, chosen for deep two-sided liquidity that keeps both legs cheap to enter and unwind.
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**Funding settlement differs by venue.** Policy: Pacifica 1h, Hyperliquid 1h, Nado 8h. The payout timer uses the *higher* interval of the two selected DEXs.
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***
#### What "Proof of Neutrality" Means in Practice
Neutrality is not assumed, it's measured and shown live. Three signals tell you whether the hedge is actually doing its job:
| Metric | What it tells you |
| ------------------- | ----------------------------------------------------------------------------------------------------------------------- |
| **Hedge Integrity** | How closely the two legs are currently offset. A high score means net directional exposure is near zero. |
| **Hedge Uptime** | How often the hedge stayed active and protective over time. Higher means the position stayed neutral more consistently. |
| **Current Spread** | The live pricing gap between the two legs - the basis the strategy is working with. |
If net exposure drifts too far from zero, the position is no longer truly neutral and carries directional risk. HyprEarn continuously rebalances to keep the legs offset and surfaces the hedge state onchain so it can be independently verified, rather than taken on trust.
***
#### Costs & Risk
Delta neutral is market-neutral, not risk-free. Watch:
* **Funding volatility** - the net rate can turn negative if the differential flips; monitor net capture.
* **Fees & slippage drag** - both legs incur trading fees and execution costs, which reduce net funding income.
* **Unbalanced exposure** - if one leg fills or moves differently, net exposure rises and directional risk returns until the hedge rebalances.
> Set PnL exits when you activate. They unwind **both legs together** so you're never left holding a lopsided, directional position.
