Use cases
Last updated
Last updated
Contango is the ultimate looping layer for your defi missions.
You can loop almost anything on it, either via the Advanced or the Simplified interface. Regardless of the interface you choose, all positions are built by automating a looping strategy, using spot and money markets.
A comprehensive trading guide with numerical examples can be found here.
Below you can find high level examples of what you can achieve with a few clicks on Contango.
Looping non-correlated pairs like ETH/USDC is identical to trading perps on other venues. But on Contango there are a few perks:
The underlying liquidity is massive: Contango taps into around $20B of liquidity across spot and money markets.
The implied funding rates are the best in the industry: Contango rates are 3x lower and less volatile than market leaders, like Binance and dYdX (full study).
You can trade yield-bearing assets as base currency like wstETH instead of plain ETH to gain an extra yield.
You can use and you can exit with any of the same currencies.
You can open multiple on the same side and pair.
You automatically from underlying money markets.
The most popular liquid staking and restaking assets, like wstETH or eETH, are available on Contango and can be looped with high leverage. Most of the LRT pairs make you accrue their own loyalty points. too.
To open a position you will probably find yourself at home using the Strategies page, where you can find dedicated ETH Staking and MATIC Staking tabs, with pre-filtered looping options for each assets. However, you might find the Trade interface useful for monitoring purposes.
Principal Token (PTs) from Pendle represents the principal portion of an underlying yield-bearing asset. Recently, they were made available as collateral on money markets like Silo, Dolomite and Morpho, so users started looping on them manually for extra yield. On Contango you can do that automatically in just 1 click.
PT instruments quote PTs against ETH or a stablecoin. Each market offers a different max leverage and liquidity. Read the dedicated FAQ section to better understand how these instruments work and what are their risks.
Please be aware that bigger and more battle-tested markets like Aave and Compound offer pretty stable funding across time. Smaller and less known markets might have more volatile rates that could spike more often and offer more enticing returns — although for shorter periods of time.
Similarly to the previous use case, you can farm USD funding rates differentials by using stablecoin pairs, like DAI/USDC. In this case, you don't need to open a delta neutral trade with two positions as both base and quote assets are pegged to the dollar.
By design, almost all rewards, airdrops or points offered by the underlying money markets will be accrued by traders on Contango.
Rewards: most money markets listed on Contango offer rewards in their native token, or incentives in USDC, OP and ARB.
Points: LST and LRT protocols have partnered with money markets - or Contango directly - to offer points to traders using their assets: point-farming pairs are available for Ethena, Etherfi, Renzo, EigenLayer. Some money markets also offer their own loyalty points: Merit rewards for Aave, Minerals for Dolomite. Check the dedicated FAQ section for details.
Airdrop: any airdrop criteria from underlying protocols also apply to Contango traders, like the SPK airdrop from Spark.
Funding rates (shown as on Contango) can be positive or negative; positive means you're getting paid, negative means you're paying. If you open a delta-neutral position on Contango, you can profit by collecting funding rates differentials.
To find the best arb opportunities, the tool is your best ally.
The on the Strategies page already shows you a filtered list of all stablecoin pairs with a minimum liquidity of $1000.
To find the best rewards opportunities, the tool is your best ally.