Leveraged Funding Arbitrage

Leveraged funding arbitrage captures the difference between funding rates for the same perpetual exposure at two venues. The strategy shorts where short funding is higher and takes an equal long where funding is lower.

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Economic Flow

1. The account owner deposits collateral into one Credit Account on Robinhood Chain.
2. The Credit Account increases debt once to the amount permitted by the strategy.
3. The account allocates its capital as margin across two integrated venues.
4. TEE-backed Executors open equal-notional long and short positions on the same underlying exposure.
5. The Robinhood Chain risk engine evaluates both legs under one strategy-scoped Health Factor.

The opposing positions offset directional price movement. The remaining economic exposure is primarily the difference between their funding payments.

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Economics

For equal position notionals: $$Gross\ Funding\ Income = Position\ Notional \times (Short\ Funding\ Rate - Long\ Funding\ Cost)$$ The strategy’s net result deducts Credit Account borrowing interest and execution costs from that funding income.

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Example

Consider an account with $10,000 of starting equity. It draws its permitted debt once and deploys margin for:

• a $50,000 ETH short on Hyperliquid receiving 15% annualized funding; and
• a $50,000 ETH long on Aster paying 5% annualized funding.

The illustrative annualized gross funding income is: $$\$50{,}000 \times (15\% - 5\%) = \$5{,}000$$ Borrowing interest and execution costs are deducted from the $5,000 gross amount. The example demonstrates the capital and cash-flow structure rather than a return forecast.