Osprey

Delta-neutral funding rate harvesting on Hyperliquid

Osprey scans every Hyperliquid perpetual every minute, scores funding rate opportunities, and runs a portfolio of 20–100 delta-neutral positions simultaneously — collecting funding payments every hour with near-zero directional exposure.

Try it live → · Architecture → · Setup →

Hyperliquid pays funding every hour (vs. every 8h on Binance/Bybit). When a pair's funding rate is elevated, shorting the perpetual and going long spot earns that rate — with zero directional exposure. You don't care if the price goes up or down.

Osprey automates the entire workflow at portfolio scale:

Funding harvesting is a spread trade against time, not a directional bet.

Entry:    SELL BTC-PERP (captures funding)  +  BUY BTC-SPOT (delta hedge)
Exit:     BUY  BTC-PERP (close short)       +  SELL BTC-SPOT (close hedge)

P&L:      funding earned − round-trip fees
Exposure: ~zero (spot and perp move together)

APY scales linearly with positions. Osprey targets the steady-state 0.005–0.020%/hr range that persists for weeks — not the 0.04%+ spikes that last hours.

Round-trip fees per $1,000 position:
  Perp entry (maker):  $500 × 0.010% = $0.05
  Spot entry (maker):  $500 × 0.010% = $0.05
  Perp exit (taker):   $500 × 0.035% = $0.175
  Spot exit (taker):   $500 × 0.035% = $0.175
  Total:               $0.45

At 0.010%/hr on $500 perp notional:
  Funding/hr = $0.05 → break-even in 9 hours
  At avg hold of 5–30 days → fees < 1% of gross ✓

Osprey defaults to post-only (Alo) order routing on all executions.

At 1,000 executions: $1,250 recovered from order type selection alone.

Fallback logic: if an order would cross the book (spread is thin), Osprey falls back to IoC to avoid post-only rejection. This matters most during HOT regimes when spreads compress.

Hyperliquid pays funding every hour. Binance pays every 8 hours.

The mathematical difference in yield from settlement frequency alone is small — both schedules converge near the same continuous-compounding limit at equal underlying rates.

The practical edge is capital efficiency:

• On Binance: earned funding sits idle for up to 8 hours per cycle
• On Hyperliquid: earned funding is available for redeployment every hour

At 0.05%/hr on a $10k position: ~$5/hr collected and immediately redeployable. Over a 24-hour HOT period: 24 reinvestment windows vs 3 on Binance.

Osprey's regime signals and entry logic are built around the 60-minute epoch — recalculating every minute to align with settlement timing.

v18 uses a 30-day rolling mean across the top 20 OI-weighted pairs to set the regime baseline. HOT threshold = 2 standard deviations above mean.

src/
├── engine/
│   ├── harvest.ts        ← Core cycle: scan → enter → monitor → exit
│   ├── portfolio.ts      ← Multi-pair sizing: OI caps, tier allocation
│   ├── deltaHedge.ts     ← Spot hedge leg management and drift tracking
│   ├── backtester.ts     ← Single-pair + portfolio backtest engine
│   ├── regime.ts         ← HOT/NEUTRAL/COLD market regime detection
│   ├── signals.ts        ← Per-pair ENTER/WAIT/EXIT signal logic
│   └── HarvestService.tsx← Mounts in AppShell, drives the harvest cycle
│
├── api/
│   ├── hyperliquid.ts    ← HL REST API: rates, candles, account state, orders
│   ├── signing.ts        ← Unified signer: browser wallet / Agent Key / WalletConnect
│   └── walletConnect.ts  ← WalletConnect v2 integration
│
├── store/
│   ├── harvestStore.ts   ← Harvest engine state (config, log, P&L totals)
│   ├── positionStore.ts  ← Live position tracking and trade history
│   ├── scannerStore.ts   ← Rate polling, pair list, last-updated timestamp
│   └── appStore.ts       ← App mode, wallet state, regime cache
│
├── hooks/
│   └── useWallet.ts      ← Unified wallet: injected / WalletConnect / Agent Key
│
└── pages/
    ├── Harvest.tsx        ← Engine config + live log + position table
    ├── Scanner.tsx        ← Funding rate heatmap
    ├── Portfolio.tsx      ← Portfolio summary + pair breakdown
    ├── Backtester.tsx     ← Strategy backtester UI
    └── Settings.tsx       ← Auth, demo config, theme

SCANNING --→ ENTERING --→ ACTIVE --→ REBALANCING --→ ACTIVE
    ↑                         │                         │
    │                         ↓                         ↓
    └──────────────── EXITING ←─────────────────────────┘

Entry: Both legs placed atomically. If spot leg fails, perp is emergency-closed. Never a naked short.

Monitoring: Funding accrues hourly (real: from cumFunding.sinceOpen; demo: simulated).

Rebalancing: When price drifts >10% from entry, spot notional is adjusted. Perp keeps running.

Exit triggers (in priority order):

1. Rate goes negative → immediate exit
2. Rate falls below 0.003%/hr exit floor → next cycle
3. Regime collapses to COLD for 3+ hours → exit all
4. Max hold time (30 days default) → force exit
5. Manual → immediate

Osprey supports three signing modes — MetaMask is not required:

An Agent Key is a secondary EOA that Hyperliquid authorizes to trade on behalf of your main account. It cannot withdraw funds — even if compromised, your balance is safe.

Setup flow:

1. Connect your main wallet (MetaMask or WalletConnect)
2. Osprey generates a fresh EOA as the agent key
3. You sign the approveAgent action once
4. All subsequent orders are signed by the agent key — no browser extension needed

Settings → Trading Authorization → [Generate New Agent Key]

The old threshold was 0.04%/hr — meaning Osprey only entered when rates were already in a spike. That captures the tail of each episode. The corrected 0.005%/hr threshold captures the body — the weeks of persistent positive carry that fund the real returns.

git clone https://github.com/yourusername/osprey.git
cd osprey
npm install
cp .env.example .env
npm run dev

Open http://localhost:5173. No API key required — Osprey reads public Hyperliquid endpoints.

For live trading:

1. Configure wallet in Settings (any EIP-1193 wallet, WalletConnect, or Agent Key)
2. Test on HL testnet first (VITE_ENABLE_TESTNET=true)
3. Set VITE_ENABLE_REAL_TRADING=true
4. Start with small positions ($50–$100/pair) to verify execution

See SETUP.md for full configuration guide.

1. Smart contract risk — Funds are in the Hyperliquid clearinghouse (sovereign L1, no custodian)
2. Liquidation risk — Delta-neutral positions can still be liquidated under extreme price moves
3. Basis risk — Spot–perp basis can temporarily widen, causing paper losses on the hedge
4. Funding reversal — Rates can go negative. System exits before negative rates erode principal
5. Slippage — Market impact on illiquid pairs. OI caps (0.5% of pair OI) limit this
6. Agent key risk — Compromise allows position manipulation but not withdrawals

Test on testnet. Start small. Osprey is beta software.

MIT — see LICENSE