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_labs. 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_co), 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.

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_labs. 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_co), 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.

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_labs. 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_co), 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.