How Castor works

Castor earns yield from the structure of derivatives markets, not from the direction of prices. This is what "delta-neutral" means.

The idea in one line

Hold an asset, and at the same time short the same amount of it with a perpetual future. If the price moves, the two positions cancel out. What is left is the yield that the market pays to keep those positions open.

The two legs

Long spot (+1.00 Δ). Castor holds the underlying asset.
Short perpetual (−1.00 Δ). Castor opens an equal short position using perpetual futures.

Added together, the net market exposure is approximately 0 Δ. "Delta" (Δ) is simply how much your position moves when the market moves. Near zero means the price direction barely affects you.

Where the yield comes from

Two structural sources, neither of which depends on price going up:

Funding rates. On perpetual markets, traders who are long typically pay traders who are short (and sometimes the reverse). Holding the short side can earn this funding.
Spreads and basis. Differences between spot and futures prices can be captured as they converge.

Because returns come from market activity rather than market direction, yield can rise in volatile, high-funding conditions, and compress when markets are quiet. APRs vary over time.

What this means for you

You do not have to predict the market. You deposit, Castor maintains the hedged position and re-balances it around the clock, and your balance accrues yield. You can withdraw at any time.

Next: make your first deposit.