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Overview

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What is Unbound?

Unbound is a Delta-Neutral BTC Yield Vault that generates yield by capturing funding rate payments on perpetual futures exchanges. Users deposit wBTC and earn passive income without directional exposure to BTC price.

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The Opportunity

On perpetual futures exchanges, traders pay or receive funding rates every hour to keep the perpetual price aligned with spot: Historically, funding rates are positive ~84% of the time because traders are generally bullish on BTC.

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The Delta-Neutral Strategy

Unbound captures this yield through a hedged strategy:
  1. Keep 50% as wBTC in the vault (LONG exposure)
  2. Swap 50% to USDC and deposit to Extended exchange
  3. Open SHORT position equal to wBTC value held (matches the hedge)
  4. Collect funding when rate is positive (shorts receive payments)
  5. Close position when funding turns negative (avoid paying)

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Why It’s Delta-Neutral

BTC price movements are hedged: if BTC goes up, the wBTC gains offset the short losses. If BTC goes down, the short gains offset the wBTC losses.

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How Funding Payments Work

Extended uses this formula:
  • If funding > 0: Your SHORT receives payment from longs
  • If funding < 0: Your SHORT pays to longs
Example with $5,000 deposit:
  • wBTC kept in vault: $2,500 (LONG)
  • USDC to Extended: 2,500→opens2,500 → opens 2,500 SHORT (matches wBTC value)
  • Position size: ~0.0284 BTC (at $88,000)
  • Funding rate: 0.0013%/hr
  • Hourly payment: ~$0.032
  • Daily payment: ~$0.78
  • Annual payment: ~$285 (~5-6% APY on total deposit)

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How It Benefits Users

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Typical APY Range

Funding rates vary based on market sentiment. Current rate may be higher or lower.

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What Unbound Does NOT Do

  • ❌ Guarantee profits (funding can be negative)
  • ❌ Provide insurance against exchange risk
  • ❌ Allow individual position management