JLP and Neutral: High-Yield Strategies in the Crypto Market

As one of the high-quality assets in the crypto market, JLP has performed remarkably since its launch. It has tripled in value within a year, with a maximum drawdown of only 30%. As the liquidity provider token for Jupiter perpetual contracts, JLP's revenue sources mainly consist of two: the earnings from being a counterparty in contract trading, and 75% of the trading fee sharing. This keeps JLP's annualized return rate consistently above 30%, and at times even exceeding 50%.

JLP consists of 47% SOL, 8% ETH, 13% BTC, and 32% USDC, providing a certain degree of downside protection while maintaining exposure to encryption asset risks. For example, when the price of SOL fell sharply, JLP only dropped by 30% and quickly reached a new high after the market rebounded.

However, JLP still faces two main risks: contract traders making profits in extreme market conditions in the short term, and the long-term decline in the price of crypto assets. To mitigate the risks posed by the latter, some institutional-level strategies have emerged.

An on-chain strategy hedge fund in the Solana ecosystem has proposed a solution: users deposit USDC, which is then exchanged for JLP. Next, JLP is collateralized in a lending protocol to borrow USDC, which is again exchanged for JLP. Finally, users short the corresponding encryption asset share of JLP through perpetual contracts, achieving risk neutrality. This strategy currently has an annualized return of over 15%, with maximum drawdown controlled within 2%.

Although retail investors can also attempt to execute such strategies, institutional-level hedge funds have a clear advantage in risk management. They have 24-hour monitoring teams, extensive experience in risk handling, and contingency plans, allowing them to better respond to issues such as liquidation risks, abnormal funding rate risks, and long-term interest rate inversions.

This on-chain hedge fund currently manages nearly $36 million in assets, generating nearly $2.5 million in returns for users. The project was founded by senior quantitative traders from top financial institutions and has secured $2 million in funding.

In addition to the main JLP neutral strategy, the fund also offers several other income strategies. It is worth noting that not all strategies are neutral risk, and investors need to make choices based on their own circumstances and risk tolerance.