Pseudo-Delta Neutral Hedging Experiment 6: How Price Volatility Affects Regular PDN

DarkRay
8 min readJun 27, 2022

This was an experiment that started as one to track the performance of a Regular PDN position based off Orca’s SOL-USDC, which yield is derived from just trading fees, and is a pool with relatively high trading trading volumes (and thus APRs) due to trading volumes directed to it from the super popular STEPN. Note that this does mean that when STEPN sets up its own DEX (Decentralized Exchange), this would be a play that no longer make sense, but we can all certainly make hay while it shines.

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.

Objective

Original Objective

I started the 14-day experiment on Monday 2nd May 2022 with the following identical 200 USDC PDN positions at both Francium and Tulip protocols on the same underlying SOL-USDC LP at Orca:

Orca’s SOL-USDC Position in Francium
Orca’s SOL-USDC Position in Tulip

The original objective was to evaluate the performance of a trading fee-only pool.

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DarkRay
DarkRay

Written by DarkRay

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