# Coinhedge

### Overview

Coinhedge is an innovative strategy that enables users to access USD liquidity while using their cryptocurrency holdings as collateral. The strategy provides a secure way to unlock the value of crypto assets without selling them, by creating a hedged position that protects against price volatility.

### Core Functionality

#### Purpose

* Enables users to access USD liquidity using their crypto assets as collateral
* Maintains price exposure protection through automated hedging
* Provides a non-custodial solution for accessing liquidity

#### How It Works

1. **Collateral Management**
   * Users deposit their crypto assets (e.g., ATOM) into the vault
   * The strategy accepts these deposits as collateral
   * Assets are securely held in a non-custodial manner
2. **Liquidity Generation**
   * Collateral is swapped to USD through integrated DEXs:
     * Osmosis
     * Duality
     * Any Skip API integrated venue
   * USD is then made available to the user
3. **Risk Management**
   * Exposure is hedged on dYdX using perpetual futures
   * Automated rebalancing maintains the hedge ratio
   * Price movements are offset between spot and futures positions

### Strategy Lifecycle

1. **Deposit Phase**
   * User deposits their crypto assets into the vault
   * Strategy verifies and accepts the collateral
   * Initial position setup begins
2. **Hedge Phase**
   * Strategy establishes the hedge on dYdX
   * Maintains the hedge through market movements
   * Monitors and adjusts positions as needed
3. **USD Distribution**
   * Generated USD is made available to the user
   * User can access the liquidity while maintaining their crypto exposure
   * Strategy continues to manage the hedge
4. **Repayment Phase**
   * User repays the borrowed USD
   * Strategy unwinds the hedge position
   * Collateral is returned to the user

### Key Features

* **Non-custodial**: Users maintain control of their assets
* **Automated**: Strategy manages all aspects of the hedge
* **Cross-chain**: Utilizes multiple blockchain networks for optimal execution
* **Risk-managed**: Continuous monitoring and adjustment of positions
* **Liquidity-focused**: Provides access to USD liquidity without selling assets

### Technical Implementation

The strategy operates across multiple chains and protocols:

* **Neutron**: Primary chain for vault and strategy contracts
* **dYdX**: Hedging venue for perpetual futures
* **Osmosis/Duality**: Liquidity venues for spot trading
* **Skip API**: Integration for optimal routing and execution

### Benefits

1. **Liquidity Access**
   * Users can access USD without selling their crypto assets
   * Maintains exposure to potential price appreciation
2. **Risk Management**
   * Automated hedging protects against price volatility
   * Continuous monitoring and adjustment of positions
3. **Flexibility**
   * Multiple DEX integration for optimal execution
   * Cross-chain functionality for broader asset support
4. **Security**
   * Non-custodial design
   * Automated risk management
   * Transparent operations


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