BTC Yield Strategies
Purpose
Sova Prime targets BTC-denominated income from market-neutral carry and secured financing. Strategies are designed to keep net BTC delta near zero, prioritize liquidity, and operate within formal policy rails. The strategy execution is operated by Mosaic Capital.
Users deposit BTC or accepted 1 to 1 BTC tokens, mint sovaBTC, and allocate to Sova Prime to receive spBTC, an ERC-4626 vault share that accrues yield via share-price appreciation in BTC terms.
Targets are illustrative and market dependent - yield is not guaranteed.
Strategy Palette
Futures basis harvest
Delta-neutral funding capture
Market-neutral institutional lending
The allocator rotates exposure across sleeves based on spread quality, liquidity conditions, and risk costs, with the option to hold cash-equivalent posture when carry is unattractive.
Key Term
Details
Product
Sova Prime BTC Yield (spBTC – ERC‑4626 vault)
Target APY (Net)
8% in BTC (market‑neutral carry; not guaranteed)
Base Asset / Accounting
BTC via sovaBTC standard; cbBTC, wBTC also accepted
Strategy
Market‑neutral BTC basis & funding‑rate capture via vetted, contract‑bound external sleeves (no net BTC delta targeted).
Liquidity
On‑chain redemptions spBTC→sovaBTC→BTC; settlement subject to network finality and policy‑bounded gates/circuit breakers.
Eligibility
Institutional, non‑US participants who pass KYA/KYT screening (Chainalysis) and accept program terms.
Custody
Qualified custodians and threshold multi‑sig for the canonical BTC bridge; segregated accounts and control agreements for venues. QC via Copper Vault, Copper ClearLoop, and Ceffu, SOC2 / ISO 27001 compliant.
Risk Controls
Hard caps on LTV, leverage, and venue concentration; conservative buffers; automated alerts and standardized reporting.
Fees
Protocol takes ~1–2% annualized (netted from returns); canonical BTC bridge ~10 bps; standard L2 fees (see Section 8).
Operator
Mosaic Capital Inc. (msc.xyz), CIMA-regulated portfolio manager.
1) Futures basis harvest
What it is Long spot BTC versus short BTC futures to capture the basis while fully hedged.
How it earns The futures contract converges toward spot into expiry. The spread between spot and futures is realized as carry, net of funding, fees, and roll costs.
How we run it
Tenor selection and disciplined contract rolls
Venue and contract diversification
Spread and cost screens prior to deployment
Margin buffers sized to volatility and liquidity
Risk controls
No naked directional exposure
Deploy and exit thresholds for basis quality
Concentration caps by venue and instrument
Automated de-risking triggers for volatility spikes or liquidity stress
2) Delta-neutral funding capture
What it is Paired long and short exposures in perpetual swaps or a perp versus spot hedge to collect positive funding with near-zero net BTC delta.
How it earns Perp markets transfer funding periodically between longs and shorts. The sleeve positions to receive funding while hedged.
How we run it
Regime detection for funding trends and mean reversion
Cost and slippage analysis versus expected funding
Automatic reductions when funding compresses or inverts
Continuous monitoring of basis, skew, and open interest
Risk controls
Limits per venue, per instrument, and per sleeve
Minimum margin and liquidation buffers
Policy-based throttles during disorderly markets
Hard stops on venues that breach operational standards
3) Market-neutral institutional lending
What it is
Secured, policy-bounded lending to vetted counterparties under Master Loan Agreements with collateral, covenants, and reporting. Proceeds are hedged to maintain near-zero net BTC delta.
How it earns
Contracted interest and fees on balances that are collateralized or otherwise credit-enhanced per policy.
How we run it
Borrower whitelists, KYA/KYT, and periodic reviews
Collateral management, margining, and call procedures
Tenor ladders and diversification by borrower and instrument
Scheduled reporting, covenants, and cure periods
Risk controls
Concentration limits by borrower, strategy, and venue
Tenor and LTV constraints where applicable
Enforcement rights defined in MLAs, including default workflows
Circuit-breakers that pause new lending during stress
Liquidity management and rotation
When spreads compress or risk costs outweigh expected carry, exposure is reduced or paused and capital rotates to cash-equivalent posture.
Position sizing respects daily TVL gates and policy capacity.
Queues and pro-rata mechanics may be used during abnormal conditions to protect holders.
Position lifecycle and hedging
Each sleeve targets near-zero net BTC delta through explicit hedges.
Hedges are sized and refreshed on defined cadence or when deviation thresholds are met.
Rolls and unwinds follow pre-set calendars and guardrails to minimize slippage and gap risk.
Collateral, custody, and settlement
Assets remain segregated at qualified custodians or approved venues.
Multi-sig and timelocks apply to programmatic custody paths.
No commingling, no rehypothecation, and no cross-margining outside approved policy.
Valuation and PnL attribution
ERC-4626 accounting with assets-per-share methodology.
Multi-source pricing with staleness checks and conservative fallbacks.
PnL attribution by sleeve with fees and costs netted into reported performance.
Share price reflects accrued BTC returns rather than distributing points or substitute tokens.
Reporting and transparency
Live telemetry for NAV, sleeve exposures, venue concentration, margin buffers, and exceptions.
Periodic factsheets and public status logs for parameter updates and incidents.
Attestations and audit results are published after remediation where applicable.
Prohibited activities
No naked directional BTC bets
No unsecured lending of vault assets
No leverage beyond policy limits
No collateral re-use or rehypothecation
No sub-allocation to third parties without written approval
No illiquid, venture-style, or non-price-discoverable instruments
No off-venue settlement, side letters outside MLA terms, or activity on non-compliant venues
No yield paid in points or venue rebates in lieu of BTC-denominated returns
What our trading partners do not do
No unhedged derivatives exposure or discretionary overlays outside approved sleeves
No commingling of client funds and no unilateral key control
No cross-collateralization outside approved venues
No undisclosed rebates, kickbacks, or PFOF-style arrangements
No suppression of risk alerts or disabling of platform controls
Violations trigger automatic de-risking, capacity cuts, and offboarding per MLA remedies
Disclosures
Sova Prime targets high single-digit net APY in BTC terms under normal market conditions - returns are not guaranteed.
Eligibility, policy checks, and safety windows may apply at deposit and redemption gateways.
Strategy composition, capacity, and parameters may chan
Last updated