Our Volatility Target protocol: Sigma
Sigma dETFs: Volatility-Targeted Investment Solutions
Sigma dETFs by Every Finance introduce a unique way to invest in top cryptocurrencies—Bitcoin, Binance Coin, Solana, and Polygon—while benefiting from advanced risk management and yield optimization strategies. Designed for investors who wish to maintain exposure to specific crypto-assets, Sigma dETFs dynamically manage portfolios to balance risk and return in volatile markets.
How Sigma dETFs Work
Sigma dETFs leverage Every Finance's proprietary Parity Line algorithm to implement a volatility-targeted strategy. Each fund balances its allocation between:
A Risky asset (e.g., Bitcoin or Solana), offering growth potential.
A Riskless asset (Gamma dETF), ensuring stability and capturing yield during high market volatility.
The algorithm adjusts these allocations dynamically based on real-time market conditions, ensuring that the portfolio's volatility aligns with predefined targets.
Parameters for Sigma dETFs:
Sigma Bitcoin
40
50
Sigma Binance Coin
45
50
Sigma Polygon
55
50
Sigma Solana
60
50
The Floor (%) ensures a minimum allocation to the Riskless asset during volatile periods, while the Cap (%) limits exposure to the Risky asset during favorable conditions, creating a controlled risk-return profile.
Benefits of Sigma dETFs:
Volatility Management: The volatility-targeted strategy mitigates market risk by dynamically reducing exposure to Risky assets during unstable periods and increasing exposure during calm markets.
Dynamic Rebalancing: Reduces Risky asset exposure during high volatility and increases it during stable periods.
Yield Optimization: During risk-off periods, Sigma allocates to the Gamma dETF, capturing yields from stable DeFi strategies, enhancing returns.
Transparency and Liquidity: Depositors receive yield-bearing tokens (e.g., vtBTC, vtBNB) that represent their share in the Sigma vault, reflecting portfolio value and accrued rewards.
Multi-Chain Compatibility: Available across Ethereum, Binance Smart Chain, and Polygon, Sigma dETFs offer diverse investment opportunities.
Use Case
For example, Sigma Bitcoin dynamically adjusts its exposure to Bitcoin based on market volatility. During periods of high instability, it might allocate 50% to Gamma dETF and 50% to Bitcoin, protecting the portfolio from excessive losses. When markets stabilize, the allocation to Bitcoin may increase up to 100%, capturing growth potential.
Sigma dETFs are ideal for investors seeking exposure to specific cryptocurrencies with a controlled risk profile, offering stability, yield enhancement, and optimized returns. By combining advanced strategies with flexible access, Sigma dETFs empower both retail and institutional investors to navigate volatile markets with confidence.
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