# Lps

### 🧠 Strategies for Liquidity Providers (LPs)

Liquidity Providers on Scall.io can earn a base yield of **20% APR** by locking assets at a specific strike price — but advanced LPs can amplify returns or manage risk through additional strategies. Here are two example strategies tailored for a **BTC/USDC market** where the current price is **$80,000**.

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#### 🧮 Strategy 1: Yield Farming with a Hedged Short

**Goal:** Create a delta-neutral position that earns a high, stable yield.

**How it works:**

* Deposit **1 BTC** into a **Call liquidity pool** at the **nearest strike price** (e.g., **$81,000**) on Scall.io.
* Simultaneously open a **short position** for 1 BTC on a centralized or decentralized **perpetual futures** exchange.

**Result:**

* You earn **\~20% APR** on Scall.io from the trader-paid rent.
* You also earn **\~15% APR** from the **funding rate** of the short position (since long traders pay funding to shorts in most bullish markets).
* The position is **delta-neutral** (price-stable), meaning you hold 1 BTC and are short 1 BTC.

> 🧠 When BTC hits **$81,000**, your liquidity may be exercised. In that case, **close the short position** to settle and realize your total yield.

**Estimated Total Yield: \~35% APR**

**Benefits:**

* Stable and predictable returns
* Protected against BTC price volatility
* Earns from two yield sources

**Risks:**

* Funding rates can fluctuate
* Must actively monitor to close short if price reaches the strike

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#### 🔁 Strategy 2: Stay Exposed to Bitcoin with Rent Yield

**Goal:** Maintain Bitcoin exposure, earn passive income on both BTC and USDC, and avoid unnecessary slippage.

**How it works:**

* Deposit **1 BTC** into a **Call liquidity pool** at the nearest strike price (e.g., **$81,000**) on **Scall.io**.
* Simultaneously, keep **$81,000 USDC** outside of Scall.io in a yield-bearing protocol like **AAVE**, earning approximately **5% APR**.

This way, you earn:

* **20% APR** on your BTC via Scall.io rent fees paid by traders.
* **5% APR** on your stablecoins through external lending platforms.

**When the strike price is reached:**

* Your BTC may be exercised and swapped for $81,000 USDC.
* Instead of manually re-buying BTC (which can cause **slippage, fees, and spread losses**), you **purchase a short-term Call option** — either on Scall.io or another options platform — with the same strike of $81,000.

> 🔁 This lets you **retain exposure to BTC** without converting your stablecoins manually each time the price moves.

#### 📈 Example Outcome:

* BTC hits $81,000 → your 1 BTC LP position may be exercised → your LP position is now 81,000 USDC.
* At the same time, you use your previously reserved USDC to **secure a new BTC position via a Call option**.
* If BTC continues rising, you’re still fully exposed to the upside — just like at the beginning with 80 000 USDC (on Scall.io now) and 1 BTC in your wallet.
* Meanwhile, you earned **passive APR** on both assets throughout the process.

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#### ✅ Benefits

* **Double yield**: 20% on your LP position + \~5% on remaining liquidity out of scall.io
* **Preserve long exposure** to Bitcoin
* **Avoid slippage and spread** by not swapping back and forth manually
* Fully **on-chain compatible** and DeFi-native

#### ⚠️ Risks

* The cost of buying short-term options may vary based on market conditions

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This strategy is ideal for long-term Bitcoin believers who want to **maximize yield while maintaining upside exposure**, and prefer a **low-touch, capital-efficient approach**.

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#### 🧠 Summary Table

| Strategy                     | Position Type   | Yield Sources                | Risk Level | Notes                                        |
| ---------------------------- | --------------- | ---------------------------- | ---------- | -------------------------------------------- |
| **Hedged Short + LP**        | Delta-neutral   | Scall Rent + Futures Funding | Medium     | Requires active monitoring, closes at strike |
| **Exposed LP with Re-entry** | Long BTC biased | Scall.io Rent                | Low        | Best for passive bullish investors           |

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These strategies demonstrate how Scall.io can be used **not just to provide liquidity**, but to **optimize capital efficiency** and **layer yields** in sophisticated ways.
