📖FAQ
Read our Frequently Asked Questions for Stablecoin Staking
How can I access the vault?
To access the vault directly, you must be a customer of either Figment or OpenTrade. Once onboarded by Figment or OpenTrade, you can access the vault and begin making investments. The vault is available through Figment and OpenTrade's respective web apps and APIs. You can also access the vault directly on chain.
What is the overall strategy for the vault?
The SOL Staking Yield is a structured investment approach designed to generate yield from Solana (SOL) Staking while eliminating exposure to SOL’s price movements.
How does the vault generate yield ?
The vault generates yield by capturing the difference between SOL Staking rewards and the cost of hedging SOL price (i.e staying neutral to SOL’s price movements).
What are SOL staking rewards and what is the typical staking rewards rate?
Staking rewards are paid to validators in exchange for helping secure the Solana (SOL) blockchain network.
When SOL is staked, it is delegated to validators who process and verify transactions on the network. In return, participants receive periodic staking rewards, paid in SOL, as compensation for supporting network operations.
Historical SOL staking yields have consistently ranged between 6.5% and 7.5% annualised, occasionally rising above 8% during periods of higher network activity.
While staking yields can fluctuate slightly over time, they are predictable, transparent, and blockchain-native, providing a reliable source of passive income that underpins the strategy’s profitability.
Why is it important to hedge against SOL price movements?
Hedging is essential because lenders (clients) invest in and withdraw from the vault using USD stablecoins. This means that any unhedged exposure to SOL’s price would directly impact the USD value of their investment. SOL’s price can fluctuate dramatically; often by double digits within weeks. Without a hedge, the USD value of SOL held in the strategy would fluctuate with the market and in a scenario where SOL’s price drops, the USD value of the investment would decrease, even if staking rewards were earned.
The strategy’s purpose is to provide stable, predictable USD-denominated yield, not speculative exposure to SOL’s price, which is why hedging is essential to preserve capital stability.
How is this product hedged (protected) against SOL volatility?
The vault utilizes perpetual futures to hedge the price of SOL. More specifically, the vault is "shorting" SOL with perpetual futures - or betting against the price of SOL. This means the vault profits when the price of SOL goes down, which offsets the loss of value on the staked SOL, and vice versa.
How much does this hedge cost?
The main cost of maintaining the hedge comes from something called the funding rate. A funding rate is a payment exchanged between traders who are long and short in the perp futures market. This payment is calculated periodically, typically every 4-8 hours.
Depending on market conditions:
If most traders are long SOL (betting on an increase in the SOL price), they pay funding to the shorts (meaning the vault gets paid), increasing the overall return of the SOL Staking Yield product.
If most traders are short SOL (betting on a drop in the SOL price), OpenTrade pays the funding to the traders who are long, reducing the overall return SOL Staking Yield product.
What are all the key steps in the transaction workflow?
Step 1: You invest USDC (or other eligible stablecoins) on-chain into the OpenTrade SOL Staking Yield Vault.
Step 2: The USDC are immediately transferred to an account held by the OpenTrade SPC (the SPV ) at an exchange.
Step 3: OpenTrade SPC and its investment advisor (AWR Capital) will “leg” into SOL spot on the chosen exchange, using passive orders and market-making tactics to minimise slippage and fees. As SOL spot is accumulated, an offsetting short position is opened in SOL perpetual futures on the same venue. Executing both legs together (“legging”) keeps delta close to zero while entering the position and reduces costs.
Legging is the systematic, programmatic, step-by-step construction of a hedged position, allowing the strategy to enter or exit delta-neutral trades smoothly, cheaply, and with minimal exposure to price movements.
SOL Spot is a direct purchase of SOLANA against USDC at the current market price (“spot price”), with immediate settlement. SOL are credited into OpenTrade’s wallet.
Step 4: Once OpenTrade has a SOL position that equals a short perp future position, the SOL are moved to a custody wallet and staked with a dedicated validator provided by Figment.
Step 5: OpenTrade receives rewards for the staked SOL and maintain the hedge (short perp) by either paying or receiving the funding rate.
Example:
Step 1: You invest with $100,000 USDC into the OpenTrade SOL Staking Yield Vault
Step 2: 100,000USDC are transferred on-chain to OpenTrade SPC's trading wallet on exchange.
Step 3: OpenTrade buys 1,000 SOL at $100 each: OpenTrade now has SOL worth 100,000USD in its wallet.
Step 4: 1,000SOL are staked on a Figment validator and start to generate staking rewards, at 7% (7% is used only as an indicative rate in this example)
Step 5 : SOL price fluctuates:
Scenario 1: SOL price goes up to $120:
1,000 SOL is now worth $120,000 generating a $20,000 gain.
OpenTrade’s PERP short loses $20,000, because SOL went up.
The funding rate is positive +1% and OpenTrade receives 1% funding rate (1% is used only as an indicative rate in this example)
Net result: OpenTrade overall position still equals about $100,000 USDC + staking rewards + funding rate
Scenario 2: SOL price goes down to $80:
1,000 SOL is now worth $80,000 creating a –$20,000 loss.
OpenTrade’s PERP short gains $20,000, because SOL went down.
The funding rate is negative -1% and OpenTrade pays 1% funding rate (1% is used only as an indicative rate in this example)
Net result: OpenTrade overall position still equals about $100,000 USDC + staking rewards - funding rate.
What are the risks of this product for the investor?
While the SOL Staking Yield vault is designed to be low-risk and market-neutral, no strategy is entirely risk-free.
Here are potential ways the vault could lose money and how those risks are managed and mitigated.
Exchange or counterparty failure:
The strategy relies on exchanges and custody providers to execute the spot transactions, hold the USDC and SOL and manage the PERP hedge.
If an exchange suffers a security breach, default, or operational failure, funds held there could be at risk.
OpenTrade SPC only trades and custody with top-tier, regulated exchanges with strong operational records and manages collateral and positions across multiple venues when possible.
OpenTrade SPC is entirely bankruptcy remote, meaning the failure of Open Trade Technology Ltd, Figment, and AWR would have no impact on the its ability to meet its obligations. Investors have a fully perfected security interest in every secured account and all collateral held within them at every step in the transaction lifecycle.
Staked SOL is held in custody, not on exchange, meaning it is segregated from exchange wallets and not included on the exchanges balance sheet.
For staking, the vault uses Figment, the largest, most reputable institutional-grade validators in the industry, with strong uptime, slashing protection, and robust security infrastructure.
Liquidation risk:
If SOL’s price spikes significantly and the collateral for the short perp held on exchange becomes insufficient, the short perp could be automatically liquidated by the exchange, leaving the product unhedged.
The vault is designed so that the short perp future cannot be liquidated under any realistic market movement, as it is fully backed by appreciating SOL collateral; meaning the collateral also rises in value when SOL’s price increases.
Funding rate turns persistently negative:
The funding rate (the cost of maintaining the short perp hedge) can turn negative in bearish markets, meaning the strategy pays an ongoing cost to hold the hedge, which may diminish the overall return or turn the return negative for a long period of time.
OpenTrade and AWR continuously monitor and optimise hedge exposure to reduce this cost, and might pause or close positions if the funding rates make the overall return negative over a period of time.
Historically, SOL’s average funding has remained either positive or negative in the low single digits, far below the staking yield, so the net carry remains strongly positive.
Over very short periods, exceptional large temporary dislocations between spot and perp futures prices (inside a few hours) could create a small temporary mark-to-market loss (-0.5% on October 10th for example) if an investor enters when SOL funding or basis conditions are unfavourable and exits immediately afterward. These short-term effects are not reflective of true performance, since the vault is designed for a holding period of several days or longer.
Over the past 2 years, the longest consecutive period of negative funding rates was 116 hours, or 4.8 days, generating a negative return for the strategy of just 0.03% over that period.
The steepest negative funding rate in the same period was –0.000519 per hour, which occurred around October 10, 2025, at 16:00.
That deeply negative period lasted for about 73 hours (≈ 3 days) — from October 10, 2025, 16:00 until October 13, 2025, 16:00, generating a negative return of just 0.8% over that period.
Decline in staking rewards
The vault stakes exclusively with Figment, a top-performing validator with strong uptime and efficient reward distribution.
This ensures the vault consistently earns yields near the upper end of the Solana network average.
Execution or operational errors
Temporary unhedged price exposure can occur while “legging in” (simultaneously buying SOL and shorting perp futures).
Operational issues can occur during the setup or transfer of assets such as human or technical errors when transferring funds
AWR’s automated trading algorithms execute both sides of the trade almost simultaneously, keeping delta exposure negligible. (refer to the Trading Deep Dive section for more details).
All fund movements are protected by mandatory address whitelisting and maker-checker approvals, ensuring assets can only be withdrawn or transferred to pre-approved, verified wallet addresses after the approval of multiple authorised users, eliminating the risk of accidental mis-sends or unauthorised transfers.
Extreme or structural market events
Network outages or congestion, which may delay staking reward distributions or slow withdrawals and transfers.
Validator downtime or performance degradation, which could momentarily reduce staking yield.
Protocol-level bugs or upgrades, which, while rare, could affect transaction finality or staking mechanisms
The vault stakes exclusively with Figment, a top-tier validator known for high uptime, advanced monitoring, and proactive participation in Solana network governance and upgrade coordination.
Solana is built for fast, frequent staking changes (delegation, activation, and deactivation all operate on a short epoch cycle (~2–3 days)) and doesn't operate a validator queue system (such as ETH).
Historical data shows Solana’s uptime and reliability have improved significantly, with recent versions maintaining >99.9% operational stability.
What stablecoins does the vault accept?
The vault is deployed on Ethereum and can accept USDC on ETH. We intend to launch on more networks and support more stablecoins in the near future.
Can I integrate or white-label this product?
Yes absolutely. You can use both Figment and OpenTrade's APIs to integrate with and white-label the product. You can also integrate with the vault directly on-chain. You can automate the entire process end to end.
What happens when I invest in the vault?
When an investor deposits USDC, the stablecoins are transferred into the wallet of a bankruptcy-remote SPV (OpenTrade SPC). This wallet is hosted by Circle. The investor receives xFIGSOL vault tokens, which represent their share in the vault and accrue value as staking rewards accumulate.
USDC is then converted to SOL on the designated exchange. Simultaneously, an equal and opposite short position is opened in SOL perpetual futures to hedge price exposure. The SOL is held with a qualified custodian and staked via a Figment validator
Who are the key counterparties and service providers involved in the transaction lifecycle?
Open Trade Technology Ltd. ("Platform Provider")
London headquartered software firm responsible for developing & maintaining the OpenTrade Platform including the web app & blockchain protocol.
OpenTrade SPC ( "Borrower")
A bankruptcy remote Cayman Segregated Portfolio Company (SPC) operated by an independent board of directors. OpenTrade SPC is currently the only Borrower approved for the Treasury Management Product. OpenTrade SPC is the financial counter-party for Lenders and broker/dealers, banks, and custodians.
OpenTrade Foundation
OpenTrade Foundation is the sole shareholder of OpenTrade SPC. It serves to make OpenTrade SPC bankruptcy remote by ensuring that Five Sigma and Open Trade Technology Ltd have no ownership stake in OpenTrade SPC, meaning its assets would not form part of their bankruptcy estates in the event either party were to become insolvent. The OpenTrade Foundation's supervisor is Leeward Management, a leading corporate service provider in the Cayman Islands.
AWR Capital
AWR Capital is a London-based algorithmic trading hedge fund and financial services company founded by leading financial executives and portfolio managers. It advises OpenTrade SPC and executes the delta-neutral SOL carry trade.
Five Sigma Finance Ltd. ("Investment Advisor")
Five Sigma Finance Ltd. ("Five Sigma") serves as the Investment Advisor. Five Sigma is a London-based, FCA regulated investment firm with over $800M AUMA. They are responsible for managing the day to day operations of OpenTrade SPC and its segregated portfolios, including its trading activity and the purchase and sale of loan collateral, managing the underlying portfolio of real world financial assets, maintaining cash flow models, and assisting in the processing of fund transfers, loan draws, and loan repayments. Five Sigma is an appointed representative of Capricorn Fund Managers, which is authorised and regulated by the Financial Conduct Authority (FCA).
Figment
Figment is a Toronto-based blockchain infrastructure firm, founded in 2018, specializing in institutional-grade staking solutions for proof-of-stake (PoS) blockchains. They provide staking infrastructure for over 700 institutional clients (asset managers, exchanges, custodians, foundations) across multiple networks. In the scope of this product, Figment provides all of the technical infrastructure required for SOL staking. It also provides access to the vault via Figment APIs and its web platform.
Crypto.com
Crypto.com is one of the world’s leading digital asset platforms, empowering over 100 million users globally to access, trade, and spend cryptocurrency with confidence. Founded in 2016 and headquartered in Singapore, the company has built a trusted, fully regulated ecosystem that bridges traditional finance and Web3 through its exchange, mobile app, Visa card, and secure DeFi wallet. In this product, Crypto.com is the venue on which SOL, perp futures are trade and additionally provides custody through which the SOL is staked with a dedicated Figment validator.
Mulvaney Trustees (UK) Ltd. dba Vantru ("Security Trustee")
Vantru serves as the Security Trustee, which holds a master security interest in the underlying loan collateral on behalf of Lenders. In the event of a default, Lenders can instruct the Security Trustee to take ownership of loan collateral to be liquidated or held to maturity so as to repay loans in default, pursuant to the Security Trust Deed executed between OpenTrade SPC and Vantru and as referenced in the Master Lending Agreement signed between OpenTrade SPC and Lenders.
Circle Internet Financial LLC ("Circle")
Circle is the issuer of USDC, the world's second largest stablecoin by market capitalisation. Circle serves as the custodian for USDC the Borrower receives from loans and provides the ability to always mint and redeem USDC 1:1 with USD. Circle is a regulated and licensed money transmitter in the US.
What are xFIGSOL tokens and how do they work?
When an user invests USDC into the vault, they receive xFIGSOL ERC-20 vault tokens. Vault tokens represent the users position in the vault.
As interest accrues, the exchange rate between xFIGSOL and USDC increases, reflecting yield earned.
When the investor redeems, the xFIGSOL tokens are burned, and an equivalent amount of USDC is returned at the latest exchange rate.
How are withdrawals processed?
The investor submits a withdrawal request via the FigApp, OpenTrade Web App, or by calling the contract directly. OpenTrade will then unstake the corresponding portion of SOL (incl. any rewards received) based on the amount requested for withdrawal. The short perp position is closed simultaneously to maintain delta-neutrality. The SOL is converted back into USDC, which is repaid to the investor's wallet. Withdrawal processing times are determined by the time required to unstake SOL. Depending on where in the epoch the withdrawal is requested, this could take anywhere from 3 to 5 days.
How can I verify the collateral exists?
Five Sigma, an FCA regulated asset manager produces a weekly “vault report” that attests to the vault's collateral (USDC, Staked SOL and perp futures of the vault) and liabilities (total outstanding loan principal).
What happen if OpenTrade ceases operations?
The vault is held inside a bankruptcy-remote Special Purpose Vehicle (SPV) meaning the assets in the vault are legally segregated from Open Trade Technology Ltd's own balance sheet.
Even if Open Trade Technology Ltd were to shut down or cease to operate, your funds would not form part of its assets and cannot be claimed by creditors.
A licensed Security Trustee (Vantru) holds a master security interest over all wallets and accounts on behalf of investors.
In the event Open Trade Technology Ltd ceases to operate or any other default or enforcement event, the Trustee can take control of the assets directly and return them to investors.
All assets are held with regulated counterparties who have been notify of the assignment to the Trustee.
Wallets are whitelisted and controlled by multi-signature access, ensuring no single party can move funds unilaterally.
What are the fees?
The vault charges a total fee of 1.10% per annum on the total amount invested in the vault.
This fee covers:
Platform fees – for operating the vault infrastructure and smart contracts.
Liquidity and execution costs – for trading, hedging, and maintaining exchange positions.
Advisory and management fees – for oversight, strategy management, and reporting.
All fees are netted from performance automatically, so investors see the yield after all fees are deducted.
How does staking work and generate yield?
Staking on Solana means helping to secure the network and earning SOL rewards in return.
When OpenTrade stakes SOL, it is delegating its tokens to a validator (like Figment) who helps confirm and add new blocks to the Solana blockchain.
OpenTrade SPC keeps ownership of your SOL and it never leaves its account.
The validator uses our delegated stake to increase its voting weight in the network’s Proof-of-Stake consensus system.
Solana’s blockchain is divided into time periods called epochs (usually about 2–3 days long). Each epoch is when the network calculates staking rewards, activates new stake, and deactivates unstaked tokens. When OpenTrade stakes SOL, it becomes active in the next epoch and when OpenTrade unstakes, it’s released after the current epoch ends.
Every epoch, the Solana protocol issues new SOL tokens (inflation) as rewards for validators who confirm blocks correctly. Validators receive these rewards and share them proportionally with the delegators (OpenTrade) who staked SOL with them.
The more SOL a validator has delegated to it and the better its performance, the higher the rewards it earns. These rewards are immediately re-staked by OpenTrade.
What are the risks associated with staking, and how are they mitigated
While staking SOL is considered a low-risk yield-generating activity, it still carries a few operational and protocol-level risks.
If the validator (Figment in Opentrade’s case) goes offline, misses blocks, or performs poorly, the vault may earn lower rewards during that epoch.
Mitigation:
The vault stakes exclusively with Figment, one of the largest and most reliable Solana validators, with >99.9% uptime.
Figment uses redundant infrastructure and real-time monitoring to maintain consistent performance.
How volatile are staking rewards?
While staking SOL is considered a low-risk yield-Staking rewards on Solana, particularly through Figment’s validator, have been remarkably stable over time. Based on historical data from September 2023 to 2025, Figment’s staking reward rate (SRR) averaged around 8.2% annualised.
Over this 18-month period, the lowest observed reward was 6.98% (on December 11, 2023), and the highest was 17.42% (on January 22, 2025), the latter coinciding with a period of elevated network activity and validator performance.
In general, staking yields have fluctuated within a narrow 7–9% band for most epochs, making them one of the most predictable sources of on-chain income compared with trading or funding-rate-based returns.
How fast can you unstake SOL?
When SOL is unstaked, it must go through a cooldown period of about 1 epoch (≈2–3 days) before becoming liquid. Once its unstaked, OpenTrade will unwind the corresponding perp future position and convert the SOL to USDC to repay the investor.
What are SOL PERPs and how do they work?
SOL PERPs (short for Solana Perpetual Futures Contracts) are derivative instruments that track the price of SOL, allowing traders to take long or short exposure to Solana without owning the underlying tokens.
A perpetual contract is similar to a traditional futures contract — except that it never expires. Instead of settling on a fixed date, PERPs are designed to track the spot price continuously through a funding rate mechanism between longs and shorts.
Because PERPs have no expiry, they rely on a periodic cash flow (the funding rate) to keep prices aligned with the spot market:
When the PERP price trades above spot, longs pay shorts (positive funding).
When the PERP trades below spot, shorts pay longs (negative funding).
The funding rate is reset every 4 hours.
Every exchange requires margin before OpenTrade can trade a perpetual futures (PERP) contract. While certain exchanges offer leverage and cross margining (where the collateral is a pool of assets), OpenTrade will margin the SOL PERP with 100% SOL (staked SOL).
How deep is the PERP market?
The SOL PERP market is very deep and liquid, with billions of dollars in active positions and daily volume.
As off October 2025 there was:
~$3.9 billion in perpetual open interest
~$34 billion per day
How do you make sure that you are always hedged?
OpenTrade, in partnership with AWR, uses an algorithmic legging process to enter the delta-neutral position efficiently and safely. When investor USDC is converted into SOL, the system simultaneously executes a long SOL spot trade and an equal-notional short SOL-PERP on the exchange.
Both legs are placed near-simultaneously through AWR’s execution engine, which continuously monitors order-book depth, spreads, and volatility to determine the optimal timing and size for each order.
The algorithm dynamically adjusts orders in milliseconds to keep the vault’s net SOL exposure (delta) as close to zero as possible, ensuring minimal slippage or temporary price risk during entry.
This automated legging process allows OpenTrade to deploy capital efficiently, maintain precise hedging accuracy, and ensure that each investor’s capital is fully protected from SOL price movements from the moment it is invested.
How is the funding rate calculated?
On crypto.com, the funding for perpetual contracts is settled hourly.
The funding rate is based on a “premium rate”, which is derived from the difference between the mark price of the perpetual contract and the index price (i.e. the spot/reference price) over a 4-hour interval.
The “Average Premium Rate” is calculated as the mean of the premium rate per minute over that 4-hour window.
Then the hourly funding rate = Average Premium Rate ÷ 4 (i.e. distributing that 4-hour premium across each hour).
During each hour end (session settlement), funding is transferred between longs and shorts: • If the funding rate is positive, longs pay shorts. • If the funding rate is negative, shorts pay longs.
How volatile is the funding rate? Can it generate an overall negative return?
The funding rate (based on Crypto.com’s data) for SOL-PERP has been fairly stable over the April 2, 2024, to October 14, 2025 period, averaging +0.000005 per hour (about +1.6% annualised) with a median of +0.000004, showing a slight long-side bias. The highest hourly rate reached +0.000139 per hour (≈ +12% annualised), while the lowest dipped to –0.000519 per hour (≈ –45% annualised).
With an hourly standard deviation of just 0.000027, the data shows that funding rates are highly mean-reverting, oscillating around neutral levels and remaining comfortably within the margin covered by the vault’s 6–8% staking yield, making the strategy structurally resilient to funding fluctuations.
Do you track the funding rate direction?
AWR maintains a forecast for funding rates on all coins at all times.
How do you pay for the funding rate? How frequently and in which currency?
Funding is settled hourly in USDC on Crypto.com, with the vault paying or receiving small amounts automatically depending on whether the funding rate is negative or positive.
Opentrade will maintain a USDC position to cater to funding rate payments and will re-invest the excess USDC back into the strategy.
Can the PERP be liquidated because of a lack of collateral?
No, liquidation risk is virtually zero with the way the SOL Staking Yield product is designed, because the short SOL-PERP is fully collateralised with the same asset it tracks (SOL), and the structure creates what’s known as “right-way risk”: the collateral and OpenTrade’s PERP position move in the same beneficial direction so the margin improves when the market moves against our trade.
Can the PERP be liquidated because of an auto deleveraging policies applied by the exchange?
No, Crypto.com does not use auto deleveraging, so the position is always hedged.
Instead, Crypto.com maintains an Insurance Fund that accumulates liquidation fees paid by losing traders. Its purpose is to cover cases where a trader’s losses exceed their wallet balance following forced liquidation. If the Insurance Fund is depleted, and there remain uncovered losses from liquidations, then the Socialised Loss Mechanism is triggered. Under this mechanism, all traders with positive profits in that session must share the uncovered losses pro rata, based on the size of their profits.
If Socialised Loss is triggered, it effectively will reduce the realized profit by the pro-rata rate applied to OpenTrade based on the profits made.
What happens if SOL price increase by 10X or 20X?
Impact on hedging
Even though the PERP will incur a huge mark-to-market loss, the SOL collateral’s value will increase by exactly the same amount.
Collateral Value ≥ PERP Mark-to-Market Loss
Impact on Funding Rate:
If SOL’s price multiplies by 10× or 20×, the funding rate itself doesn’t mechanically increase and the rate will depend on market sentiment, not price level.
However such bull run typically drives long-side demand, causing funding to turn positive (longs pay shorts), so the vault would earn additional income.
Impact on staking rewards:
If SOL’s price increases, the staking rewards (in SOL terms) remains unchanged as the Solana protocol pays rewards in SOL, not in dollars. However, the USD value of those rewards will increase proportionally with the SOL price. As the product is fully hedged, rewards credited in SOL will be hedged upon receipt.
What happens if SOL price drops by 50%
Impact on hedging:
The PERP profit offsets the reduced SOL collateral value. The PERP gain is immediately marked to market, in real time.
The vault’s total account equity (SOL value + PERP PnL) remains constant.
Impact on Funding Rate:
The funding rate on SOL perpetual futures (SOL-PERPs) is likely to change meaningfully, because many traders will try to hedge or speculate on further downside, pushing the PERP price below spot temporarily as shorts crowd in.This is likely to push the funding rate in negative territories and OpenTrade will have to pay longs.
Impact on staking rewards:
If SOL’s price drops, the staking rewards (in SOL terms) remains unchanged as the Solana protocol pays rewards in SOL, not in dollars. However, the USD value of those rewards will fall proportionally with the SOL price. As the product is fully hedged, rewards credited in SOL will be hedged upon receipt.
How do you respond to ADL (auto de-leveraging) ?
Crypto.com does not implement ADL so it is not a risk with the current vault set up. If and when the vault expands to exchanges that do, below is a summary of we mitigate the risk of ADL.
An Auto-Deleveraging (ADL) event happens when the exchange cannot close a liquidated trader’s position through the order book or insurance fund, and instead automatically reduces positions on the opposite side of the market (in our case partially or fully unwinding our short SOL-PERP position).
ADL on major assets like SOL is extremely rare and indicates a severe market dislocation (e.g., sudden price spikes and system-wide liquidations).
OpenTrade and AWR take a 5 steps approach to mitigating ADLs and the impact of ADLs:
Monitor ADL queues and alerts continuously track exchange ADL indicators, margin levels, and liquidation warnings through API or dashboard monitoring.
Pause new investments conversion: temporarily halt new deposits conversion into spot SOLANA; keeping incoming funds in USDC until the market normalises.
Diversify exposure across venues: spread hedge positions across multiple exchanges to reduce single-exchange ADL risk.
Rebalance to delta neutrality: adjust exposure to restore the vault’s delta-neutral position by selling the long or short position.
If ADL is triggered: rebuild the short hedge as soon as trading resumes, restoring the structure and validating margin health across venues. This may take a few hours and days depending on the size of the position.
How do you respond to persistently negative funding rates?
Historically, SOL’s average funding has remained either positive or negative in the low single digits, far below the staking yield, so the net carry remains strongly positive.
Over very short periods, exceptional large temporary dislocations between spot and PERP prices (inside a few hours) could create a small temporary mark-to-market loss (-0.5% on October 10th for example) if an investor enters when SOL funding or basis conditions are unfavourable and exits immediately afterward. These short-term effects are not reflective of true performance, since the vault is designed for a holding period of several days or longer.
Over the past 2years, the longest consecutive period of negative funding rates was 116 hours, or 4.8 days, generating a negative return of just 0.03% over that period.
The steepest negative funding rate in the same period was –0.000519 per hour, which occurred around October 10, 2025, at 16:00.
That deeply negative period lasted for about 73 hours (≈ 3 days) — from October 10, 2025, 16:00 until October 13, 2025, 16:00, generating a negative return of just 0.8% over that period.
If funding rates stay negative for a period of time (shorts pay longs) it creates a drag on the yield, reducing overall profitability. Although historically this is an exceptionally rare occurence, if they were to remain steeply negative for a sustained period of time, > 72 hours, the strategy will:
Quantify the net carry loss from funding vs staking yield
Pause new investments conversion : temporarily halt new deposits conversion into spot SOLANA; keeping incoming funds in USDC until the market normalises.
Convene a risk meeting with our investment advisors to decide on the way forward and the correct strategy to adopt.
The trading system operating by AWR tracks funding rates 24/7/365 and has automated monitoring and alerting so in the above scenario would be extremely clear and would be being monitored from the first instant it started.
How do you respond to / mitigate the risk of socialised losses?
Should the exchange impose a profit haircut (Socialised Loss) across profitable accounts to cover residual bankrupt losses, OpenTrade would:
Diversify exposure across venues: spread hedge positions across multiple exchanges to reduce single-exchange Socialised Loss risk.
Pause new investments conversion : temporarily halt new deposits conversion into spot SOLANA; keeping incoming funds in USDC until the market normalises.
Assess the impact on overall return and re-evaluate exchange selection if the risk persists.
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