Perpetual futures are a foundational tool in the cryptocurrency derivatives market. They rely on a funding mechanism that periodically transfers value between long and short positions, aligning contract prices with spot markets. This process occurs every eight hours across major exchanges.
Although familiar to many traders, funding rates remain underused as a consistent yield source. Scrypt Solutions has built its strategy framework around this mechanism, using it as a central driver of performance.
Funding rates exist due to persistent imbalances in leveraged positioning. In bullish conditions, long perpetual positions dominate, pushing prices above spot and triggering positive funding payments from longs to shorts. The reverse occurs during bearish periods.
Retail trading behavior, sentiment concentration, and exchange fragmentation reinforce these inefficiencies. These dynamics make funding premiums durable and repeatable across market cycles.
Scrypt’s strategies are structured to isolate the funding component of returns while minimizing exposure to asset price movements.
Key trade types include:
Returns are derived from funding rates, not market appreciation. Positions are constructed to remain hedged while systematically collecting yield.
Hold the underlying crypto asset and short the perpetual to collect funding in trending markets.
Example Scenario:
Capture the premium of longer-dated futures while collecting ongoing funding.
Example Scenario:
Take opposite positions on two exchanges with significantly different funding rates.
Example:
Funding rates fluctuate but tend to revert. Their patterns reflect leverage cycles, not price forecasts. These structural traits make them more predictable than directional trades and suitable for systematic deployment.
Scrypt’s capital is allocated to rate-driven setups, not price momentum. This allows for more consistent returns and reduced exposure to sharp drawdowns.
Executing funding arbitrage at scale requires more than strategy. It demands infrastructure, automation, and speed. Here's how Scrypt overcomes the barriers that keep most out:
Scrypt’s funding strategies have produced results aligned with their design goals:
These numbers reflect structural yield extraction, not price speculation.
Scrypt’s platform includes:
This ensures strategies remain efficient and scalable—even in fast-moving markets.
Funding rates in perpetual futures offer a measurable, repeatable source of return. Scrypt’s infrastructure and discipline allow it to access that yield systematically, without relying on market timing or price bets.
This approach transforms a market mechanic into a dependable performance engine—and opens access to it for investors seeking uncorrelated, stable returns.
1. Are these strategies dependent on Bitcoin price movements?
No. Positions are hedged and neutral to price changes. Returns come from rate dynamics.
2. What happens when funding rates reverse?
Scrypt unwinds or adjusts positions automatically. Negative yield setups are avoided.
3. How is leverage used in these strategies?
Used selectively for capital efficiency—never for directional bets.
4. Can these strategies scale as capital increases?
Yes, but capacity is actively monitored. Position sizing adapts to liquidity and rate conditions.
5. Could other firms replicate this approach?
The concept is known. Execution, infrastructure, and consistency are the differentiators.
6. How often are profits realized or distributed?
Funding is collected up to three times daily. NAV is reported monthly.