Strategies

The Strategies section outlines practical, repeatable ways to use XCCY primitives to generate yield, hedge risk, or express views on interest rates.

These are composable building blocks, not black-box products. Strategies can be run manually, automated, or combined depending on risk appetite and capital efficiency needs.

Strategy Types

XCCY strategies generally fall into five categories:

1. Market Making & Liquidity Capture

Earn fees by providing liquidity where flow is persistent and two-sided.

• Internal Market Making

• Hedged Market Making

• Liquidity provision across tenors and settlement types

Focus: fee income, spread capture, inventory control.

2. Yield Arbitrage

Exploit pricing differences across:

• fixed vs floating rates,

• coin-settled vs USDC-settled instruments,

• IRS vs perpetual funding markets.

Focus: low directional risk, basis convergence.

3. Rate Directional Strategies

Take views on future rate movements using IRS:

• lock rates before expected drops,

• float exposure before expected spikes.

Focus: macro or protocol-level yield expectations.

4. DV01-Neutral Yield Construction

Stack yields while neutralizing price exposure.

Examples:

• floating lending + IRS hedge,

• fixed yield replication with custom tenor,

• LP + hedge via IRS.

Focus: capital efficiency, predictable outcomes.

5. Opportunistic & Event-Driven

Exploit stress, dislocations, or forced flows.

Examples:

• liquidation mining,

• ADL flow capture,

• volatility-driven fee spikes.

Focus: timing, execution quality, risk controls.

Strategy Design Principles

All strategies should consider:

• margin mode selection,

• collateral correlation,

• liquidity depth by tenor,

• early exit constraints,

• liquidation thresholds.

XCCY exposes risk transparently — strategies succeed through discipline, not hidden guarantees.

What This Section Covers Next

Each page provides:

• strategy goal,

• required components,

• execution steps,

• risk notes,

• common variations.

You can run these strategies:

• as a single account,

• across multiple margin modes,

• or via automation.

Proceed to individual strategy guides to get started.