Cross-Exchange Arb
Overview
The Hyperithm Cross-Exchange Funding Arb vault captures yield from funding rate differentials across centralized and decentralized perpetual futures markets. When funding rates diverge across venues, the strategy takes offsetting spot-long and perpetual-short positions to earn the spread while maintaining near-zero directional exposure.
Capital is allocated dynamically across this primary strategy and select complementary trades, with strict risk controls governing directional exposure and margin health at all times.
Live since January 2026
How it works
Funding rates on perpetual futures markets frequently diverge across venues. When one exchange's perpetual is trading at a significant premium to another — reflected in elevated funding rates — the strategy exploits the differential, earning the spread while remaining market-neutral.
The strategy operates across a dynamically selected universe of assets where funding rate opportunities are present. Asset selection and position sizing are governed by real-time monitoring of funding rates, borrow rates, and margin efficiency across all active venues.
On venue coverage: The strategy operates primarily across Lighter, Hyperliquid, OKX, Binance, Gate, Bybit, Kucoin and CME, Nasdaq and NYSE.
Yield Sources
Perpetual funding payments — earned when holding net short perpetual positions during periods of positive funding
Spot-perp price inefficiencies — captured through simultaneous spot and futures positioning
Borrow rate differentials — additional carry from cross-venue financing rate differences
Risk Factors
Liquidation and ADL risk — Extreme price movements can trigger forced liquidation or Auto-Deleveraging on futures venues, even with delta-neutral positioning. Mitigations include: trading only liquid assets, constant position rebalancing to manage ADL rank, venue-level exposure caps, and cross-margin interaction monitoring.
Funding rate risk — Funding rates can compress, turn negative, or shift regime rapidly. The strategy monitors rates continuously and adjusts positions when net expected yield no longer justifies execution costs or margin usage. The system is designed to adapt to sign flips and crowding dynamics.
Counterparty and operational risk — A service provider failure could impair operations or delay redemptions. Mitigations include: Copper and Ceffu off-exchange settlement, which keeps assets with independent custodians rather than on exchange balance sheets; Fordefi MPC infrastructure for on-chain asset security; whitelisted-only contract interactions; and Admin Quorum requiring multiple approvals for any policy change. Hyperithm has API access to manage strategy execution but no ability to withdraw user assets.
Smart contract risk
Custody & Security
For positions held on centralised exchanges, assets are held via Copper (ClearLoop) and Ceffu (MirrorX), institutional off-exchange settlement providers. Rather than sitting on exchange balance sheets, assets remain with the custodian throughout trading, reducing exposure to exchange-level insolvency.
On-chain vault infrastructure, covering deposits, withdrawals, and onchain operations, operates under Neutral Strategy Vaults standard multi-party approval framework, independent of the centralised exchange custody arrangements. Full details: Security.
Last updated