Renzo Protocol has rebranded as Renzo Finance and is launching an automated basis-trading product on Hyperliquid, marking a move beyond the project’s original focus on crypto restaking.
The first product, Renzo Basis, will support Bitcoin and HYPE and is designed to earn yield from perpetual futures funding rates while reducing exposure to directional price moves. Users take a long position in an asset on the spot market and an equal-sized short position in its perpetual futures market, creating a hedged trade whose returns are tied primarily to the funding payments exchanged between perpetual traders.
Renzo Finance is entering a growing market for onchain structured-yield products, where protocols and asset managers are packaging trading strategies traditionally run by specialist desks. Its approach centers on self-custody and user-defined risk controls rather than a pooled strategy in which users share execution and liquidity risks.
a hedged trade built around funding payments
A basis trade combines two positions in the same asset: a spot purchase and a corresponding perpetual futures short. If a user buys one BTC in the spot market and shorts one BTC through a perpetual contract, gains and losses from broad Bitcoin price moves should largely offset, provided the hedge remains properly sized.
The remaining source of return is the perpetual market’s funding rate. Perpetual futures do not expire, so exchanges use periodic funding payments to keep their prices close to the underlying spot asset. When perpetual contracts trade above spot and funding is positive, long-position holders generally pay short-position holders. A basis strategy that is long spot and short perpetual can collect those payments.
Funding conditions can change rapidly. A strategy that earns positive funding in one period may face lower income or even negative funding if futures positioning reverses. Renzo Basis is intended to automate execution, monitor the positions and maintain the hedge as market conditions shift.
That design places the product closer to an active market-neutral trading strategy than to a fixed-income instrument. The hedge may reduce sensitivity to the asset’s outright price, but it does not remove risks tied to funding-rate changes, execution quality, trading fees, liquidity and the ability to rebalance positions during volatile periods.
Hyperliquid wallets keep assets in user control
Renzo Finance said Renzo Basis uses Hyperliquid agent wallets, also called API wallets, to execute transactions. These wallets allow an application to place trades on behalf of a user without requiring the application to take custody of the underlying funds.
The company said the product does not currently use artificial intelligence to manage the strategy. Its automation instead relies on trading permissions granted through these agent wallets and on rule-based controls that govern when and how positions are adjusted.
That distinction matters in a market where “automated” products are often described in broad terms. Renzo’s system is designed to follow defined trading instructions, rather than delegate portfolio decisions to an AI model. Users retain control of the wallet holding their assets while authorizing the application to carry out the paired spot and perpetual trades.
Self-custody does not eliminate operational risk. Users must still understand the permissions granted to an agent wallet, while the strategy depends on Hyperliquid’s markets, infrastructure and order execution functioning as intended. A hedge can also become imperfect if one leg cannot be filled, closed or rebalanced at the desired price.
three controls set the strategy’s operating limits
Renzo Finance said users will be able to configure three safeguards: a hedge guard, a yield guard and a safety buffer.
The hedge guard is intended to monitor the balance between the spot and perpetual positions, helping prevent the trade from becoming materially exposed to a price increase or decline in the underlying asset. Maintaining that balance is central to any basis strategy; a mismatch between the two legs can turn a funding trade into a directional position.
The yield guard is designed to respond to changes in the funding environment. Since funding rates are the strategy’s main income source, an automated product needs parameters for periods when the expected yield falls below a user’s threshold or turns unfavorable.
A safety buffer adds an additional risk setting around the strategy’s operation. Renzo Finance said the safeguards are adjustable, allowing users to choose how conservatively the system should manage its positions. The practical value of that flexibility will depend on how clearly users can assess the trade-offs between staying deployed, preserving the hedge and limiting exposure during thin or fast-moving markets.
Renzo enters an increasingly competitive yield segment
Basis-trade products have become a prominent source of crypto-native yield as demand has grown for strategies less dependent on tokens appreciating in value. Ethena has used derivatives positions as part of the structure supporting its dollar-linked USDe product, while Bitwise’s Superstate has also developed products drawing on crypto basis-trading opportunities.
Renzo’s product differs in its stated emphasis on individual, onchain and self-custodial deployment. Rather than placing assets into a common pool with a manager determining the strategy’s aggregate exposure, Renzo Basis is intended to give each user control over selected operating parameters.
That model could appeal to users who want direct visibility into their positions and do not want to hand assets to a centralized trading desk. It also places more responsibility on users to understand whether funding income adequately compensates for trading costs, liquidity conditions and the possibility of adverse execution.
expansion plans include more Hyperliquid markets and equity perps
After the initial BTC and HYPE rollout, Renzo Finance plans to extend Renzo Basis to Hyperliquid assets that have both active spot and perpetual futures markets. The availability of both markets is necessary for the strategy because it needs a spot position and an offsetting derivatives position in the same asset.
The company also plans to explore other decentralized-finance venues. Lighter on Robinhood is next on its roadmap, according to Renzo Finance, with the proposed product described as an onchain equity-perpetual basis trade. Such an expansion would connect the same paired-position framework to equity-linked perpetual markets, where liquidity, trading hours and market structure may differ from crypto assets.
Renzo Finance is also testing other structured products, including autocallables and growth notes. Autocallables typically pay periodic coupons and may redeem early if an underlying asset reaches a specified performance level. Growth notes are designed to provide exposure to upside performance while incorporating a defined degree of downside protection.
Those products would move Renzo further from restaking and toward a platform offering packaged onchain trading strategies. Renzo Basis will provide the first test of whether users are willing to manage structured yield directly through self-custodial wallets while navigating the variable economics of perpetual futures funding.
Learn how funding rates shape BTC basis trades in our guide to crypto funding rates and improve your strategy.
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