DegenWings - User Manual

Below you can find the technical details about how DegenWings works.

We strongly recommend reading them carefully to fully understand the platform’s behavior and risk management logic.

If you have any doubts or questions, you can always contact our support team.

  • DegenWings does not open positions. It monitors the account to make sure it remains delta neutral and checks that funding rates do not fall below the threshold set by the user. It also provides stop loss and take profit management between the spot market and the USDT perpetual futures market of the same coin.
    When performing funding rate arbitrage, the goal is to keep a funding-paying position open for as long as possible in order to minimize the impact of entry and exit fees.

  • DegenWings should be viewed as a tool designed to protect traders from the adverse events that may occur throughout the lifetime of this type of position.

  • DegenWings simultaneously monitors both the spot account and the USDT perpetual futures account.

  • DegenWings expects you to have purchased a coin on the spot market and to hold an equivalent short position on the USDT perpetual futures market. See Video

  • DegenWings considers a position delta neutral when the size difference between spot and futures is lower than 1%.

  • Because of this behavior, DegenWings should be paused when opening new trades or moving assets between accounts.

Imagine you have a delta-neutral position consisting of 1,000 XXX on the spot market and -1,000 XXX (short) on the futures market.

If the exchange triggers ADL on your futures position and automatically closes your -1,000 XXX short, DegenWings will automatically sell 1,000 XXX from your spot position.

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Or imagine that -500 XXX of your futures position reaches your first stop loss. In that case, DegenWings will sell 500 XXX on the spot market.

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Now imagine you simply want to reduce your position. You can sell 100 XXX on the spot market, and DegenWings will automatically reduce your futures short by 100 XXX to keep your position hedged.

Remember that a short futures position is effectively the equivalent of a sale. Closing a short futures position means buying it back.

DegenWings ensures that your spot and futures positions always remain equal in size and opposite in direction. If one position is closed or reduced, the other will be automatically closed or reduced by the same amount to keep your portfolio hedged.

  • DegenWings ignores USDT, USDC, and the coins used to pay trading fees, such as KCS on KuCoin, MNT on Bybit and MX on MEXC.
    It is strongly recommended that users use the exchange’s native coin to pay trading fees.

This not only provides fee discounts - which are particularly important for this strategy - but also prevents the creation of dust balances and helps maintain a perfectly delta-neutral position.

  • DegenWings ignores all assets with a value below $11. This prevents interference with any dust balances a user may have in their account and avoids placing orders that would be rejected for being below the exchange's minimum order size.

For best performance, users are advised to keep their accounts clean and free of dust tokens.

  • DegenWings uses the coin ticker to check delta neutrality. If spot and futures use different tickers, they will be treated as two different cryptocurrencies (for example SHIB and 1000SHIB).

  • If DegenWings needs to close part of a spot position to restore delta neutrality, it may cancel spot limit orders. It does not cancel all orders, only the ones necessary to free the required size. Orders are canceled starting from the lowest price.

  • Liquidations have additional costs. For this reason, it is recommended to place a stop loss before the liquidation price. See video.

  • DegenWings sends market orders. On low liquidity markets, it is recommended to place multiple exit orders before the liquidation price, allowing DegenWings to exit in smaller steps instead of with a single large order. See video

  • On KuCoin, DegenWings operates on Classic Accounts and does not support Unified Trading Accounts. On Bybit, DegenWings operates on Unified Trading Accounts.

  • DegenWings works with both Cross Margin and Isolated Margin.

  • DegenWings manages the account as a whole, not individual trades. For this reason, it is recommended to use a dedicated subaccount only for delta neutral positions. 
    See How to create a subaccount on Bybit - How to create a subaccount on Kucoin - How to create a subaccount on Mexc

  • DegenWings is non-custodial and does not hold your funds, connecting directly via API. Therefore, it cannot prevent external exchange risks, such as downtime, execution errors, or exchange insolvency. That said, DegenWings is built to remain resilient: if an exchange server stops responding, DegenWings will continuously retry the operation until the server comes back online.

  • Depending on the subscription plan, there is a maximum number of monitored trades. If this limit is exceeded, the user will receive an email and the robot will automatically pause.

  • One subscription allows the user to run one robot. A robot can be deleted at any time, but deleting a robot does not cancel the subscription.

  • A user can have an unlimited number of subscriptions and robots, including different plans depending on their needs.

  • Subscriptions are purchased in USDT on the POL network through our proprietary payment gateway.

If you have any doubts or questions, feel free to contact our support team at any time.

Now that you understand how DegenWings works, you are ready to open your first delta-neutral trade. See video
 
 

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