Solution Overview

The concept of contango in market trading is crucial for understanding how Bond Hive optimizes its yield bearing token issuance strategies. Contango occurs when:

• Future price of a commodity is higher than the spot price

• Traders expect the commodity’s price to rise over time

Contango Market and basis spread

Entering Delta Neutral Strategy - Automated Workflow

Bond Hive leverages contango market condition to structure profitable investments. We do it for user by:

• Selling futures contracts

• While simultaneously buying the underlying asset in spot at its current price

Thereby securing a guaranteed profit from the difference. If this position is maintained until maturity, at which point the prices converge, allowing investors to realize a profit from the difference.

Sustainability of Yields