The ELUSD protocol operates a risk control framework that combines spot and futures-based hedging to protect asset value against market volatility.
Hedge positioning adapts automatically to high/low Kimchi Premium regimes so that the overall portfolio remains delta-neutral at all times.
Spot-Based Hedging
Depending on premium regimes, the protocol switches between USDT↔USD across Korean exchanges and FX-hedging platforms to keep portfolio value denominated in USD, thereby enhancing stability.
Futures-Based Hedging
On global derivatives venues, the protocol maintains a KRW short (USD long) to offset FX fluctuations and uses measured leverage to improve capital efficiency.
Integrated Risk Management
This hedging architecture is not merely loss avoidance; it underpins yield stabilization and is a core foundation of the peg-maintenance mechanism.
