Cetra — Closed Beta Launch
For more than half of the year, we were working at the forefront of DeFi, creating products at the intersection of DeFi automated strategies, Real Yield narrative, and derivatives.
Today we are proud to announce, that Early Adopter participants can be the first to test the Hedged UniV3 Market Making vaults.
Launch details:
Date: March 8, 2023
Chains: Polygon & Optimism Mainnet
Strategy: Delta-neutral strategy based on UniV3 with automated market risk hedging & IL management
Access: Early-Adopters
What is Cetra?
Cetra is a fully decentralized and open-sourced market-neutral farming protocol. Reduce up to 90% of farming risk while maintaining high yields on your stablecoins. Cetra’s Strategies cater to those who prefer time-tested instruments and algorithms over fleeting trends. We offer APRs independent of incentive programs and full risk control without worrying about the FUD and hype, relying only on solid math and trusted tools.
Strategies
The first strategy we introduce is “Hedged UniV3 market-making”. It is designed as USD-notioned “Real yield” vault.
Its “mint” flow consists of 3 steps (lets consider WETH/WBTC UniV3 pool for illustrative purposes):
- User deposits USDC.
- USDC deposited as collateral to lending protocol; WETH and WBTC being borrowed in exact proportion to match current strategy’s UniV3 range and fit current strategy borrowing LTV (health factor).
- Borrowed tokens are deposited into UniV3 pool.
You’re done! All next steps fully handled by on-chain Chainlink and Gelato keepers, that manage LP range and maintain safe LTV, based on Cetra’s contracts logic.
Why is it Delta-neutral?
You can think of the position in terms of 3 “sub-positions”:
- We own S USDC as collateral and owe X WETH tokens and Y WBTC tokens to aave.
- We own X +- dx WETH tokens and Y -+ dy WBTC tokens that are kept in UniV3 pool. Amounts dx and dy vary due to AMM design: the variability in essence causes Impermanent Loss.
- We receive F — trading fees from UniV3 pool, L — lending return and need to pay I — borrowing interest. Usually revenue F + L significantly outweights expenses I.
Due to Cetra’s rebalancing mechanism, dx and dy IL variations are kept small and on position closing we own in pool almost exact X and Y to repay the debt (fee revenue is partly used to compensate the shortage).
After repaying we can redeem back our collateral S plus remaining fees converted to USDC, and enjoy the USD — notioned yield.
Risk/Return profile of delta-hedged market making
This type of strategies fits mid-long term investors who are able to incur local drawdowns, having consistent higher returns in longer perspective.
Here is an example of historical modelling of pool’s performance:
An open-source solution for everyone
Cetra is a decentralized protocol designed to offer a market-neutral farming experience. It is open-sourced and accessible to anyone. We believe in an open, decentralized, community-owned future and our aim is to develop Cetra with you. Our team has done conducting extensive internal code reviews & comprehensive unit tests.
! But the smart contracts have not yet been audited, so do your own research and review the code and contracts on Github and Docs before investing!
At the moment we are only running Cetra in pseudo-closed mode. The main goal now is to get feedback from you, refine the strategies and improve the UX. Above you can see a detailed roadmap for next year.
Although, please note that APR since inception (Net APR) is calculated based on real performance. For now it works only for a few days, so is expected to be volatile and needs more time to stabilize.
How to participate
To take part in the closed beta test you need to complete the following steps:
- Become an Early Adopter
- Join Discord and get the link
And you are early.
