Neutral Trade Raises $2M to Democratize Onchain Hedge Fund Strategies

Since its inception, DeFi has always encouraged accessibility, empowering the common user to employ complex strategies typically reserved for the financial elite.

Neutral Trade, an emerging Solana DeFi protocol, is breaking down the walls protecting TradFi’s once-exclusive tactics. During Accelerate, SolanaFloor sat down with Neutral Trade’s Head of Business Development, Will, to dive into the app’s more popular vaults.

Democratizing Access to Financial Products

Constituting 63.92% of the protocol’s TVL, Neutral Trade’s most popular product is undoubtedly its $JLP Delta Neutral Vault. Delta-neutral trading strategies aim to eliminate exposure to market direction by balancing long and short positions. 

Gains and losses from price movements offset each other, allowing the user to generate yield from other sources like funding rates, trading fees, or liquidity incentives. 

“We hold spot $JLP, collateralize that in Drift, and using their cross-margin capabilities, we hedge out using short perpetual positions the unutilized underlying assets Bitcoin, Solana, Ethereum. We also hedge out and remove your exposure to Trader PNL… What that means is Bitcoin goes up or down in price, Solana goes up or down, or Ethereum; You're not exposed to those price movements. What you are exposed to is the yield.”

Since launching back in Q4 2024, Neutral Trade’s delta-neutral vaults have enjoyed a somewhat steady performance, with day one depositors netting ~24% ROI in certain vaults. However, Will asserts that depositors shouldn’t expect predictable rewards.

“A lot of people are used to lending or stable LP where yields are quite linear, whereas the $JLP Delta neutral vault, for example, is nonlinear. $JLP yield is from borrowing those assets, as well as liquidations, so yield can spike… It's not a straight line going up and right. It bounces around, but over the long term, those drawdowns become quite small and you can enjoy the larger yield that we offer with these products.”

Solana DeFi Integrations

Neutral Trade’s primary strategy is built on top of Drift Protocol’s perpetual markets. On top of enabling the protocol to execute its delta-neutral strategy, depositors also earn Drift Fuel, making them eligible for incentivized rewards.

The platform has also benefited from integrations with other emerging Solana DeFi protocols. Carrot DeFi, another popular yield aggregator, allocates a small portion of its deposits to Neutral Trade to diversify its yield sources. This creates a mutually-beneficial relationship wherein Carrot DeFi can pass boosted yield to its users while helping to bolster Neutral Trade’s TVL.

“It's a win-win. We can provide them with some nice yields, as well as they're helping us by allocating to us.”

Neutral Trade Raises $2M

After launching in Q4 2024, Neutral Trade has steadily grown its TVL, which peaked at over $50M in February. Based on internal data, Neutral Trade vaults have generated over $1.97M in P&L for depositors.

On May 31st, Neutral Trade announced the successful completion of a $2M funding round led by Ergonia, Skyland Ventures, and BlackPine.

With more resources secured, Neutral Trade is eager to expand the protocol and integrate a wider array of trading venues to provide users with a more diverse range of yield opportunities. 

When pressed on forward plans regarding Neutral Trade’s ongoing points program, Will teased that users would have plenty to look forward to, but wasn’t willing to share the prized alpha.

“​​I don't have anything to announce about points right now again, but I think people will be pretty excited for what we have coming.”

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