Sable Delta Neutral

The Delta Neutral vault earns yield by capturing the spread between USDC borrow cost and USDC yield.

Risk Level: 4 (Medium-High)
Strategy: Deposit WBTC → Borrow USDC → Supply USDC to Vesu PRIME → Earn spread

Strategy Overview

WBTC (Re7 xBTC Pool)
  ↓ Supply as collateral
Borrow USDC (50% LTV)
  ↓ Deploy to yield
Vesu PRIME USDC Pool
  ↓
Spread = USDC Supply APY - USDC Borrow APY + BTCFi STRK Rewards

Why “Delta Neutral”?

This strategy is BTC price neutral because:

WBTC collateral value = $100
USDC debt value = $50 (50% LTV)
If BTC ↑2x: collateral = $200, debt still$ 50 → profit $100
If BTC ↓0.5x: collateral = $50, debt still$ 50 → breakeven (no loss from BTC drop)

The vault earns from the interest rate differential, not BTC price movement.

Yield Sources

Source	Type	Net Impact
Vesu PRIME USDC Supply APY	Revenue	+5-10%
Re7 xBTC USDC Borrow APY	Cost	-2-5%
BTCFi STRK Rewards	Revenue	+3-8%
Net Spread	Profit	+6-13% APY

Risk Profile

Liquidation risk: If BTC drops >50%, USDC debt could exceed collateral value
Negative spread risk: If USDC borrow cost > supply yield, vault loses money
Oracle risk: Uses Pragma Oracle for BTC/USD price (auto-deploy only)
Dual Vesu pool risk: Exposure to both Re7 xBTC and PRIME USDC pools

Contract Architecture

File: delta_neutral.cairo (~800 LOC)
Deployed: 0x06c8779ee7ed14b35ac5c6eae5dc721cc3e8104a65ffef4b5252babc407a1012

Core Components

Dual Vesu Pools
Auto-Deploy Strategy
Flash Loan Unwind

Delta Neutral manages two separate Vesu positions:

struct Storage {
    // ...
    vesu_singleton: ContractAddress,
    wbtc_pool_id: felt252,     // Re7 xBTC (collateral + debt)
    usdc_pool_id: felt252,     // PRIME USDC (yield)
    debt_asset: ContractAddress, // USDC
    // Strategy state
    wbtc_collateral: u256,
    usdc_debt: u256,
    usdc_deployed: u256,
    pragma_oracle: ContractAddress,
}

WBTC Pool (Re7 xBTC):

Collateral: WBTC
Debt: USDC

USDC Pool (PRIME):

Collateral: USDC
Debt: None (pure supply)

Deposits auto-execute the full strategy:

fn _deploy_to_strategy(ref self: ContractState, amount: u256) {
    // Step 1: Supply WBTC as collateral to Re7 xBTC pool
    wbtc.approve(wbtc_pool_addr, amount);
    vesu.modify_position(/* deposit WBTC collateral */);

    // Step 2: Get BTC price from Pragma Oracle
    let pragma = IPragmaOracleDispatcher { contract_address: oracle_addr };
    let price_response = pragma.get_data_median(DataType::SpotEntry(0x4254432f555344));
    let btc_price: u256 = price_response.price.into();

    // Step 3: Borrow USDC at 50% LTV
    // usdc_borrow = wbtc_sats * btc_price_8dec * 50 / 10^12
    let usdc_borrow = (amount * btc_price * 50) / 1000000000000;
    vesu.modify_position(/* borrow USDC */);

    // Step 4: Supply ALL borrowed USDC to PRIME yield pool
    usdc.approve(usdc_pool_addr, usdc_borrow);
    usdc_pool.modify_position(/* deposit USDC collateral */);
}

From delta_neutral.cairo:740

Withdrawals use a flash loan to atomically unwind both positions:

fn on_flash_loan(
    ref self: ContractState,
    sender: ContractAddress,
    asset: ContractAddress,   // USDC
    amount: u256,              // Full USDC debt
    data: Span<felt252>,
) {
    // Step 1: Repay ALL USDC debt + withdraw ALL WBTC collateral from Re7
    usdc.approve(wbtc_pool_addr, max_u256);
    vesu.modify_position(ModifyPositionParams {
        collateral: Amount { /* withdraw ALL WBTC */ },
        debt: Amount { /* repay ALL USDC debt */ },
    });

    // Step 2: Swap WBTC -> USDC via AVNU (Ekubo WBTC/USDC pool)
    wbtc.approve(avnu_addr, wbtc_to_sell);
    avnu.multi_route_swap(
        wbtc_addr, wbtc_to_sell, usdc_addr,
        0, min_usdc_out, this, 0, Zero::zero(), routes,
    );

    // Step 3: Approve USDC for flash loan repayment
    usdc.approve(wbtc_pool_addr, amount);

    // All positions closed, WBTC becomes idle
    self.usdc_debt.write(0);
    self.wbtc_collateral.write(0);
}

From delta_neutral.cairo:995

Key Functions

User Functions

deposit

function

Deposit WBTC and receive yvBTC-DN sharesParameters:

assets (u256): Amount of WBTC to deposit (8 decimals)
receiver (ContractAddress): Address to receive vault shares

Returns: u256 — Number of shares minted

Auto-deploys to:

Supply WBTC to Re7 xBTC pool
Query BTC price from Pragma Oracle
Borrow USDC at 50% LTV
Supply USDC to PRIME yield pool

withdraw

function

Burn shares and withdraw WBTCParameters:

assets (u256): Amount of WBTC to withdraw
receiver (ContractAddress): Address to receive WBTC
owner (ContractAddress): Share owner

Returns: u256 — Number of shares burned

Flash Loan Unwind (if USDC debt exists):

Withdraw ALL USDC from PRIME pool
Flash loan USDC to cover gap
Repay USDC debt + withdraw WBTC from Re7
Swap ~5% WBTC → USDC to repay flash loan
Send remaining WBTC to user

Curator Functions

deploy_collateral

function

Supply idle WBTC to Re7 xBTC pool as collateralParameters:

amount (u256): WBTC to supply

fn deploy_collateral(ref self: ContractState, amount: u256)

Implementation at delta_neutral.cairo:343

borrow_and_deploy_usdc

function

Borrow USDC against WBTC collateral, then deploy to PRIME poolParameters:

borrow_amount (u256): USDC to borrow (6 decimals)

fn borrow_and_deploy_usdc(ref self: ContractState, borrow_amount: u256)

Implementation at delta_neutral.cairo:373

Two-step process:

Borrow USDC from Re7 xBTC pool
Supply USDC to PRIME pool (earns yield)

unwind_usdc

function

Withdraw USDC from PRIME, repay Re7 debtParameters:

amount (u256): USDC to unwind (6 decimals)

fn unwind_usdc(ref self: ContractState, amount: u256)

Implementation at delta_neutral.cairo:425

Leaves 2 microUSDC buffer to avoid Vesu rounding errors on repayment.

withdraw_collateral

function

Withdraw WBTC collateral from Re7 poolParameters:

amount (u256): WBTC to withdraw (8 decimals)

fn withdraw_collateral(ref self: ContractState, amount: u256)

Implementation at delta_neutral.cairo:492

Can only withdraw if health factor remains safe (debt < 70% of collateral value).

flash_unwind

function

Emergency full unwind via flash loanParameters:

wbtc_to_sell (u256): WBTC to swap for USDC repayment
min_usdc_out (u256): Minimum USDC from swap (slippage protection)
routes (Array<Route>): AVNU swap routes

fn flash_unwind(ref self: ContractState, wbtc_to_sell: u256, min_usdc_out: u256, routes: Array<Route>)

Implementation at delta_neutral.cairo:584

Integration with External Protocols

Vesu Re7 xBTC Pool (Collateral + Debt)

Pool ID: 0x03a8416bf20d036df5b1cf3447630a2e1cb04685f6b0c3a70ed7fb1473548ecf Delta Neutral uses this pool for:

Collateral: WBTC
Debt: USDC borrowed at 50% LTV

vesu.modify_position(ModifyPositionParams {
    collateral_asset: wbtc_addr,
    debt_asset: usdc_addr,
    user: vault_address,
    collateral: Amount { /* WBTC amount */ },
    debt: Amount { /* USDC amount, positive = borrow */ },
});

Vesu PRIME USDC Pool (Yield)

Pool ID: 0x03976cac265a12609934089004df458ea29c776d77da423c96dc761d09d24124 Delta Neutral supplies all borrowed USDC to this pool to earn yield:

usdc_pool.modify_position(ModifyPositionParams {
    collateral_asset: usdc_addr,
    debt_asset: usdc_pool_debt_asset,  // Valid registered asset (no debt)
    user: vault_address,
    collateral: Amount { /* USDC amount */ },
    debt: Amount { /* zero */ },
});

Pragma Oracle (Auto-Deploy Only)

Address: pragma_oracle (constructor parameter) Delta Neutral uses Pragma to calculate 50% LTV borrow amount:

let pragma = IPragmaOracleDispatcher { contract_address: oracle_addr };
let price_response = pragma.get_data_median(DataType::SpotEntry(0x4254432f555344));
let btc_price: u256 = price_response.price.into();  // 8 decimals

// USDC to borrow = wbtc_sats * btc_price * 50 / 10^12
let usdc_borrow = (amount * btc_price * 50) / 1000000000000;

From delta_neutral.cairo:776

Data Type: SpotEntry(0x4254432f555344) = “BTC/USD” as felt252

AVNU WBTC/USDC Swap (Flash Unwind)

For flash loan repayment, Delta Neutral swaps WBTC → USDC via Ekubo (hardcoded route):

let swap_params: Array<felt252> = array![
    token0, token1,              // WBTC, USDC (sorted by address)
    0x20c49ba5e353f80000000000000000, // fee 0.05%
    0x3e8,                       // tick_spacing 1000
    0x0,                         // extension
    0xFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF, // sqrt_ratio_limit (max)
];

From delta_neutral.cairo:960

Example Usage

Depositing WBTC

import { Contract } from 'starknet'

const deltaNeutralVault = new Contract(deltaNeutralABI, deltaNeutralAddress, account)
const wbtc = new Contract(erc20ABI, wbtcAddress, account)

// Check minimum deposit
const minDeposit = await deltaNeutralVault.min_deposit()
console.log('Min deposit:', minDeposit / 1e8, 'WBTC')

// Deposit (auto-borrows + deploys USDC)
const amount = 10_000_000n // 0.1 WBTC
await wbtc.approve(deltaNeutralAddress, amount)
await deltaNeutralVault.deposit(amount, account.address)

// Check yvBTC-DN balance
const shares = await deltaNeutralVault.balance_of(account.address)

Checking Strategy State

// Strategy info: (wbtc_collateral, usdc_debt, 0, paused)
const [wbtcColl, usdcDebt, _, paused] = await deltaNeutralVault.get_strategy_info()

console.log('WBTC collateral:', wbtcColl / 1e8)
console.log('USDC debt:', usdcDebt / 1e6)

// USDC deployed to PRIME pool
const usdcDeployed = await deltaNeutralVault.get_usdc_deployed()
console.log('USDC in PRIME pool:', usdcDeployed / 1e6)

// Verify 50% LTV
const btcPrice = 95000 // Example: $95k/BTC
const collateralValue = (wbtcColl / 1e8) * btcPrice
const ltv = (usdcDebt / 1e6) / collateralValue
console.log('LTV:', (ltv * 100).toFixed(2) + '%')  // Should be ~50%

Monitoring Yield Spread

// Fetch Vesu pool APYs from API
const vesuAPI = 'https://api.vesu.xyz/pools'
const pools = await fetch(vesuAPI).then(r => r.json())

const re7xBTC = pools.find(p => p.pool_id === '0x03a8416bf20d036df5b1cf3447630a2e1cb04685f6b0c3a70ed7fb1473548ecf')
const primeUSDC = pools.find(p => p.pool_id === '0x03976cac265a12609934089004df458ea29c776d77da423c96dc761d09d24124')

const usdcBorrowAPY = re7xBTC.usdc_borrow_apy  // Cost
const usdcSupplyAPY = primeUSDC.usdc_supply_apy // Revenue
const btcfiRewardsAPY = 5.0 // Example STRK rewards

const netSpread = usdcSupplyAPY - usdcBorrowAPY + btcfiRewardsAPY
console.log('Net yield spread:', netSpread.toFixed(2) + '% APY')

Withdrawing WBTC

// Withdraw all (triggers flash loan unwind)
const maxWithdraw = await deltaNeutralVault.max_withdraw(account.address)
await deltaNeutralVault.withdraw(maxWithdraw, account.address, account.address)

// Flash loan process:
// 1. Withdraw ALL USDC from PRIME pool (~$50 if started with 0.1 WBTC)
// 2. Flash loan $0.50 USDC to cover rounding gap
// 3. Repay $50 USDC debt to Re7 + withdraw 0.1 WBTC collateral
// 4. Swap 0.001 WBTC -> $0.95 USDC (enough to repay flash loan)
// 5. User receives ~0.099 WBTC

Security Considerations

Risks

Liquidation Risk: If BTC drops >50% suddenly, USDC debt could exceed 70% of collateral value
Negative Spread Risk: If USDC borrow APY > supply APY, vault loses money until spread recovers
Oracle Risk: Pragma Oracle failure could cause incorrect borrow amounts on auto-deploy
Dual Pool Risk: Exposure to both Re7 xBTC and PRIME USDC smart contract risks
Flash Loan Dependency: Withdrawals require Vesu flash loans to work
USDC Liquidity Risk: Large withdrawals from PRIME pool could face liquidity issues

Risk Mitigation

50% LTV buffer: Leaves 20% margin before 70% liquidation threshold
Flash loan safety: Only vault can initiate on_flash_loan callback
PRIME pool liquidity: Largest USDC pool on Vesu (~$50M TVL)
Rounding buffer: Leaves 2 microUSDC on repayments to avoid reverts
Pause mechanism: Owner can halt deposits if spread turns negative
Proportional share burn: On partial unwinds, users only lose proportional shares (not full balance)

Health Factor Monitoring

// Monitor liquidation risk
const vesuPool = new Contract(vesuPoolABI, re7xBTCPoolAddress, provider)
const [position, collValue, debtValue] = await vesuPool.position(
  wbtcAddress,        // collateral_asset
  usdcAddress,        // debt_asset
  deltaNeutralAddress // user (vault)
)

// Health factor = (collateral * LT) / debt
// LT (liquidation threshold) ≈ 70% for Re7 xBTC USDC debt
const healthFactor = (collValue * 70n) / (debtValue * 100n)
console.log('Health factor:', Number(healthFactor) / 100)

// Safe: health > 1.4
// Caution: health 1.0-1.4
// Danger: health < 1.0 (liquidation imminent)

Overview

Vault Contracts

Privacy Contracts

Other Contracts

Delta Neutral Vault

Sable Delta Neutral

Strategy Overview

Why “Delta Neutral”?

Yield Sources

Risk Profile

Contract Architecture

Core Components

Key Functions

User Functions

Curator Functions

Integration with External Protocols

Vesu Re7 xBTC Pool (Collateral + Debt)

Vesu PRIME USDC Pool (Yield)

Pragma Oracle (Auto-Deploy Only)

AVNU WBTC/USDC Swap (Flash Unwind)

Example Usage

Depositing WBTC

Checking Strategy State

Monitoring Yield Spread

Withdrawing WBTC

Security Considerations

Risks

Risk Mitigation

Health Factor Monitoring

Additional Resources

Overview

Vault Contracts

Privacy Contracts

Other Contracts

Documentation Index

​Sable Delta Neutral

​Strategy Overview

​Why “Delta Neutral”?

​Yield Sources

​Risk Profile

​Contract Architecture

​Core Components

​Key Functions

​User Functions

​Curator Functions

​Integration with External Protocols

​Vesu Re7 xBTC Pool (Collateral + Debt)

​Vesu PRIME USDC Pool (Yield)

​Pragma Oracle (Auto-Deploy Only)

​AVNU WBTC/USDC Swap (Flash Unwind)

​Example Usage

​Depositing WBTC

​Checking Strategy State

​Monitoring Yield Spread

​Withdrawing WBTC

​Security Considerations

​Risks

​Risk Mitigation

​Health Factor Monitoring

​Additional Resources

Sable Delta Neutral

Strategy Overview

Why “Delta Neutral”?

Yield Sources

Risk Profile

Contract Architecture

Core Components

Key Functions

User Functions

Curator Functions

Integration with External Protocols

Vesu Re7 xBTC Pool (Collateral + Debt)

Vesu PRIME USDC Pool (Yield)

Pragma Oracle (Auto-Deploy Only)

AVNU WBTC/USDC Swap (Flash Unwind)

Example Usage

Depositing WBTC

Checking Strategy State

Monitoring Yield Spread

Withdrawing WBTC

Security Considerations

Risks

Risk Mitigation

Health Factor Monitoring

Additional Resources