STIX

🚀Exciting news for STIX! We've been featured on incredible platforms and shouted out by industry leaders recently. Check out the highlights below! 🎉👇

Very good read. The era of effortless stablecoin / synthetic $ yield is over. Most sizeable defi strategies have been around 4.5-8% for the last 6 months, a lot juiced by token incentives. This was pre 10/10 (leverage in the system has disappeared) and pre Stream. What looked like risk free income for the previous two years was largely driven by unsustainable incentives, inflated token prices, maybe worth the risk/reward when there was excess capital in the system. When you speak to family offices and tradfi they need at least 10%, or why take the smart contract risk? They are happier if your setup is more institutional custodial based as well different to how we grew up thinking about DeFi. If yield comes easy, it’s rarely durable or often has excess leverage built in. You need yield that is sustainable in bull and also bear (when everything else falls off a cliff or trends to US treasuries).

You are asking important questions. Firstly, margin risk is systematically managed and no otc concentration in a single name. These are quite diversified. The protocol maintains a margin buffer, a target leverage ratio on the portfolio + liquid stable coins to meet required calls. Most of the protocol (80%) is actually in yield bearing stables, or discretionary liquid cash and carry which can actively be accessed in extreme scenarios, we dynamically unwind positions or rebalance exposure using OTC partners like @stix and other partner, to ensure minimal slippage and avoid panic selling. For eg. A target of just 10-20% is in the OTC arb and the rest in liquid earning positive basis yield wherever is good which can be unwound in dire events. Also there are no concentrated OTC positions in case 1 token rallies. If you run a monte carlo of the top 100 tokens, you will see it is quite rare for all of them to rally that hard at once but saying this an individual rally can happen, this part is highly diversified. We do not hedge pre market or new launch tokens which may be riskier. 2. An insurance pool exists to backstop tail risk. We’ve have a protocol owned reserve fund funded via LPs, protocol revenue, and contributions. This exists specifically to cover edge cases like hedge impairment, or exchange risk events. 3. Very importantly Liquidity needs are considered before entering any OTC trade. We only acquire tokens with sufficient hedge liquidity, on multi venues and we avoid long-tail or exotic assets that can’t be effectively managed. If the hedge cannot be reliably maintained, we don’t execute the trade. I will be putting out more scenarios and a performance update soon. gNeutrl.

Some thoughts on the locked token market & the biggest source of yield in crypto that no one is talking about I joined STIX a few months back, which is the largest brokerage firm for locked tokens, and have been observing/learning about the secondary OTC landscape. With this new perspective, I have become increasingly excited about a project that we co-lead the seed round on and have worked with as they've become one of our largest clients. That project is @neutrl. I believe they are taking advantage of the strongest remaining source of yield in the market, (& actually making money), which will likely only grow from here. In crypto, the market for locked tokens is very opaque, but generally the way that this market works is the following: A foundation/team/investor/fund wants to offload a position that they've taken on. They approach a seller directly or transact through an OTC firm (typically @stix), which we facilitate by tapping into our deep client base/expertise, but who is on the buyside and how are these transactions priced? Locked token OTC transactions are typically done at a discount to the underlying spot price for the asset, this is because the buyer needs to be compensated for the lockup duration and lack of liquidity for the position relative to spot. In some cases, these deals can include liquid tokens being sold at a discount with a self-enforced vest via smart contract. In some cases, lockup periods may be shorter depending on the specific vesting schedule or counterparty agreements in place. I anonymized our recent transaction data and visualized this dynamic, and as you can see, the longer the lock up, the steeper the discount to spot becomes. These discounts can reach well upwards of 50%. The buyside for these transactions is partially made up of individuals/funds that wants to take on the direct naked exposure of the asset being sold. However, a large portion of our client base is typically coming in on the buyside to source one leg of the "OTC arbitrage trade". This is done by purchasing the underlying asset at a discount to spot, shorting, often through perpetual futures, and locking in the spread. For example, say the price of XYZ token is $100, and the locked tokens are sold at a 50% discount, or $50. An entity can buy the locked tokens, short the corresponding perpetual futures associated with that token, then hold both positions to duration. Your profit is: Spot Price - OTC price - Funding rates/fees. At STIX, we expect this yield and arbitrage opportunity to continue to grow. In my view, Neutrl sits in a unique position in the market because its strategy remains attractive even in a bearish altcoin environment. As the altcoin supply continues to expand and selling pressure increases, more holders area likely to exit positions at deeper discounts, further driving the volume and profitability of OTC opportunities. So now that we've laid out the basics of the OTC arbitrage trade, I want to highlight what exactly Neutrl is doing. Neutrl announced its seed round back in April and since has been growing quickly, recently raising over $50mm from private LPs and $75mm in its pre-deposit vault. The Neutrl team has built out a team to execute the OTC arb strategy/yield & packaged it into a yield bearing vault for stakers of its native synthetic dollar, NUSD. These yields can reach low to mid percentage APY, as shown in the graphic earlier in this write-up. Neutrl also deploys capital into liquid delta neutral strategies such as funding rate arbitrage. This approach is similar to that of Ethena’s cash/carry model, but with the OTC component serving as a huge driver of yield. One thing that sets Neutrl apart is that the team is deeply connected and able to negotiate preferential terms directly with foundations, securing shorter vesting periods, steeper discounts, and repeat deal flow. As Neutrl continues to grow, this advantage compounds, reinforcing access to high-quality opportunities. Neutrl also serves as a strategic partner to counterparties by unwinding positions gradually instead of selling on the open market. This ends up being a win/win for both parties. There is not a whole lot to get excited about in the altcoin market outside of Hyperliquid and a few other projects at the moment, but I think Neutrl is the most fundamentally excited I've been about something in crypto in a while. Risks/disclosures: There are risks associated with all crypto currencies. The biggest risk to Neutrl I would say is managing the execution of the short leg of the spread trade, which is worth being aware of. This is not a solicitation to deposit into Neutrl. I have exposure to the project and Neutrl is a growing client of STIX's on the buy side so I may be biased. Never financial advice, conduct your own research, etc.

How digital asset treasuries are fuelling a new wave of #altcoin demand. My interview with @taran, Founder and CEO of @stix. The full interview is available on my YouTube and podcast platforms. YouTube: bit.ly/42Ue7gK Spotify: bit.ly/4hwfatd Apple: bit.ly/42TQ5SV Powered by @phoenixgroupuae

Habibi, see you in Dubai! @token2049

Welcome to the future of onchain OTC

We recently made an investment in @Spectral_Labs. Check out our thesis!

Our Founder, @taran was invited to the @0xSteadyLads podcast to discuss OTC trading dynamics for altcoins and the affect of recent US elections on altcoins and meme coin markets. Listen now! 🎧

Just seen the figures from our @KRNL_xyz pre-seeding announcement, and I'm pleasantly surprised by the reach it obtained. @trgcapi @YapCapital @Superscrypt @RyzeLabs @stix @BlockchainFF @BuilderVC @WVenturesCap

STIX is headed to Bangkok for DevCon! We are looking forward to meeting our partners, friends and power users. If you'd like to meet up, our DMs are open!

As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.

@0xpotato3 @0ctoshi @echodotxyz He actually doesn't, but he's right you know. The potato is always right seems like

STIX team is headed to Singapore for @TOKEN2049! We are looking forward to meeting our partners, friends and power users. If you'd like to meet up, our DMs are open!

📢SPEAKER ANNOUNCEMENT! We are thrilled to confirm an outstanding lineup for the “Navigating Crypto Market Volatility and Cycles” panel discussion at THE CRYTO BASH, our premier event on Sep 17 during #TOKEN2049! 🚀 💫Featuring💫 @Vivien_BingX, Chief Product Officer at @BingXOfficial @0xsky404, Partner at @J17Crypto @carlhua, Managing General Partner at @reforge_vc @taran, CEO of @stix @10x_Research, Founder of @10x_Research 💖Special thanks to our TITLE SUPPORTER @W3X_NW! 🎟️RSVP here! lu.ma/jt27o0wp #cryptocurrency #blockchain #web3 #AI #Ethereum #Bitcoin #gaming #BTC #ETH #DePIN

If your customers are the main investors in your seed round, you know for sure that you're onto something great! A lot of our seed investors at @stix are our power users.

🚀Join us for an unparalleled fusion of innovation, connection, celebration, and scenic beauty during #TOKEN2049! @BingVentures, @BingXOfficial, and @followin_io are holding an unmissable event at the iconic rooftop bar CÉ LA VI. 📅Sep 17 ⏰2 pm – 7 pm 🎟️lu.ma/jt27o0wp 🍸Enjoy a buffet of innovative contemporary Asian cuisines while networking with speakers and participants from @dfinity, @coinfund, @plcapital, @J17Capital, @reforge_vc, @oceanprotocol, @stix, @10xResearch, @satlayer, @ABGAasia, @theblockless, @MYX_Finance, @aspecta_ai, @BanklessVC, @lookonchain, @publicworksfm and more! 💕Shout out to our media partners: @Cointelegraph, @beincrypto, @CoinGapeMedia, @panews, @ChainCatcher_, @Foresight_News, and @CoinliveHQ, for their tremendous support! #Crypto #Blockchain #Web3 #AI #DePIN #BTC #ETH

OTC discounts to spot prices REDUCE in a bear market, not vice versa. We're doing more otc volume now than we were in q1/q2. Smart buyers buy when markets are down. Simple tbh

Wanna learn more about the current state of crypto otc? Read this!