Pseudo-Delta Neutral Hedging Experiment 3: Deploying PDN Techniques to Grow My Token Stash
I am very much into Pseudo-Delta Neutral (PDN) type strategies lately and I started wondering if I can introduce some elements of PDN into a strategy that:
- Grows the number of tokens that I just want to hold. This means that unlike regular PDN type strategies, I am not focusing on growing the equity value here but on increasing the number of tokens I have. At some point in time, the situation may be that due to the fall in the price of the tokens, the equity value may fall, but I should have more tokens that I have started with.
- Achieves better results than the interest received when I just lend them out
So with the RAY and SAMO I had on hand, I conducted this set of experiments.
Disclaimer: This is not investment or financial advice, but a sharing of my adventures and learnings in crypto space, where I conduct various experiments with different tokens and protocols across different blockchains.
The Setup
The method was simply splitting my available holdings of RAY and SAMO into equal halves and then depositing one part of each to the lending pools of Francium or Tulip protocols, with the other part into 3x Leveraged Yield Farming (LYF). To try to maximize the yield for lending, I switched them over to whichever protocol that was offering the higher yield during my daily checkpoints. On most days, I ended up parking SAMO at…
