Modulis 6 · Strategies

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Strategy A — Operations Playbook

Strategy essence

Strategy A → Strategy B

Strategy A is a learning strategy — it shows how each component works on its own. In practice it generates very small or negative profit, so in the next lesson we'll learn Strategy B, which optimizes these parameters into a profitable system. Think of Strategy A as a "blueprint," not a final product.

Strategy A combines four income sources into one system: lending interest + LP fees + options premiums + price appreciation. All of it with downside protection.

Why an 'Operations Playbook'?

This strategy has a clear weekly and 90-day cycle with concrete actions. This isn't "buy and hold." It's like a pilot's checklist — every step is written down, every situation anticipated. Just follow the instructions.

Architecture — 4 layers

Like a recipe in the kitchen

Each layer is like an ingredient in a recipe. One gives flavor (interest), another gives texture (LP fees), a third gives protection (options). Together they create a complete dish — a balanced portfolio.

SOL/ETH collateral — Kamino or Aave. Earns ~6% per year from day one. LTV is kept around ~30%
Borrow USDC (30% LTV) — this is the cheapest way to get "working capital" without giving up your SOL/ETH
~1/3 of the USDC goes to Deribit ad — the protection budget. This money buys Put Spread protection and sells a Covered Call
~2/3 of the USDC goes into an LP — Orca SOL or Meteora SOL if your collateral is SOL; Uniswap V3/V4 ETH if your collateral is ETH. A single-sided position, from -20% to the current price. Earns fees from trading

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Disclosure: the Deribit link is an affiliate link — the course is paid a commission if you register through it. It does not affect the fees you pay on Deribit and it is not a recommendation to trade. Note as well that Deribit holds no EU MiFID II licence, so options are bought on a third-country platform. Regulated EU alternatives worth checking for yourself: OKX Europe, Crypto.com.

Money flow — how it all connects

Important: the strategy has two separate branches, and they don't mix. If your collateral sits on Solana, the LP is built on Solana too — Orca SOL or Meteora SOL. If your collateral is on Ethereum, the LP is built on Ethereum — Uniswap V3/V4 ETH. USDC borrowed on Aave ETH cannot reach an Orca LP by itself: it would need a bridge, and a bridge is a separate risk this strategy does not take on.

Solana branch:

SOL (100%)
    |
    +---> Kamino Collateral [SOL] (+ supply APY)
    |         |
    |         v
    |    Borrow USDC (30% LTV)
    |         |
    |         +---> 1/3 --> Deribit (Put Spread + Covered Call)
    |         |
    |         +---> 2/3 --> Orca / Meteora LP [SOL]
    |
    +---> Direct price appreciation (45% exposure)

Ethereum branch:

ETH (100%)
    |
    +---> Aave Collateral [ETH] (+ supply APR)
    |         |
    |         v
    |    Borrow USDC (30% LTV)
    |         |
    |         +---> 1/3 --> Deribit (Put Spread + Covered Call)
    |         |
    |         +---> 2/3 --> Uniswap V3 / V4 LP [ETH]
    |
    +---> Direct price appreciation (45% exposure)

Each layer in detail

1. Collateral — SOL Kamino or ETH Aave

Parameter	Value
Asset	SOL or ETH
Earnings	~6% per year
LTV target	30% (safe)
Liquidation LTV	75% for SOL collateral on Kamino (checked 2026-09-05)
Liquidation price (entry SOL@$88, 30% LTV)	~$35

Why 30% LTV? Because we want a large buffer to liquidation. SOL has to fall ~60% to reach the liquidation price (from $88 down to ~$35). That gives you time to react.

The threshold depends on the collateral, not on the protocol

There is no single "Kamino threshold." For SOL collateral the liquidation threshold is 75% (the max LTV you can borrow to is 74%), while for USDC collateral it is 90%. On Aave ETH the ETH threshold is different again, around 83%. Kamino SOL V2 runs roughly 40 separate markets with different parameters, so before you open a position always check the threshold on the reserve page of the market you are actually using.

A note on the maths: the course computes LTV with safety multipliers (debt scaled up by 1.05, collateral scaled down by 0.90). That is not how Kamino computes it — it is a deliberate safety margin that warns you earlier. Using the course formula, the same assumptions would trigger the warning at around $41 rather than $35.

Why $88 everywhere?

The example uses SOL = $88. At the time of writing (2026-09) the market is around $102 — the numbers are illustrative, and the mechanism does not depend on the price. A reality check: in 2026-06 SOL fell to about $60, which is below the lower edge of this example's LP range ($70.40). Drops like that do happen.

2. LP position — Orca or Meteora

Parameter	Value
Type	Single-sided USDC position
Range	From -20% to the current price
Example (SOL@$88)	$70.40 — $88.00
Earnings	~30-50% per year

Why single-sided? It acts like a paid limit order: if the price drops, you automatically buy SOL cheaper. And while you wait, you collect fees.

3. Options protection — Deribit (120-day cycles)

Position	Type	Strike	Purpose
Put Spread	Long Put + Short Put	-5% to -30%	Protection against a drop
Covered Call	Short Call	2x price	Income that lowers the protection cost

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A Covered Call strike at 2x the price means SOL would have to double for you to lose the asset. Over 120 days, that's very unlikely.

Weekly cycle — the "Friday ritual"

Each week you perform the following actions:

Collect LP fees — take the accumulated trading fees from Orca/Meteora
Move SOL fees to Collateral — if the LP converted some USDC into SOL (price dropped), move that SOL over. This lowers LTV
Move USDC fees to the "Protection Vault" — a separate amount, accumulated for the next Put purchase. Over 120 days enough must build up to buy the next Put
Reinvest the surplus — if fees exceed the protection budget, use the extra to further reduce LTV. This creates a compounding effect (money earning on money)

Weekly action	From	To	Purpose
Collect fees	Orca/Meteora	Wallet	Take the earnings
SOL fees	Wallet	Kamino/Aave	Lower LTV
USDC fees	Wallet	Protection Vault	For the next Put
Surplus	Vault	Kamino/Aave	Compounding effect

90-day cycle — managing the options

Rolling the Put Spread

Day 0:    Buy a 120-day Put Spread
Day 90:   30 days left --> ROLL WINDOW!
             1. Sell the old Put Spread (still has value)
             2. Buy a new 120-day Put Spread
Day 120:  New Put Spread is active for another 90 days

Covered Call — don't roll it!

Day 0:    Sell a 120-day Covered Call (strike 2x)
Day 120:  Let it expire (usually worthless)
             --> Sell a new 120-day Call

What happens at different prices (over 120 days)

Move	New price	Collateral	LP	Options	Total result
-60%	$35.20	-$6,653	-$2,150	+$4,200	-$4,603
-30%	$61.60	-$3,326	-$800	+$2,100	-$2,026
-20%	$70.40	-$2,218	-$200	+$1,200	-$1,218
0%	$88.00	$0	+$710	-$400	+$310
+20%	$105.60	+$2,218	+$710	-$600	+$2,328
+50%	$132.00	+$5,544	+$710	-$700	+$5,554
+100%	$176.00	+$11,088	+$710	-$1,200	+$10,598

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In the -60% scenario ($35.20) LTV climbs to 75% — the Kamino SOL liquidation threshold. In other words, the last row of that table is the liquidation point itself, not "nearly." Under the course's conservative LTV formula the warning would fire even earlier, at around -53%. The response is already planned: you'll learn crisis-management protocols in lesson 6-4 and handle a scenario like this calmly, according to plan rather than in a panic.

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And this is not theory: on 2026-02-05/06 SOL fell 18% in two days and Kamino SOL processed 55,649 liquidations worth $19.4M in total. The buffer exists not for "if" but for "when."

Who is this strategy for?

Fits	Doesn't fit
Portfolios of $5k-$50k	Very small portfolios (<$2k)
Believe in long-term SOL/ETH growth	Want to get rich quick
Can spend 1-2 hours/week	Don't have the time
Understand options basics	Dislike risk

Profitability

Which numbers this table is built on

The table is calculated on a 42% LTV example portfolio — debt of $4,704 and LP capital of $3,200. That is the same example used in Strategy B, which keeps the two strategies comparable side by side.

At the 30% LTV this lesson actually recommends, the debt would be $3,326, LP capital around $2,217, and every row would shrink by roughly 30%. The net result as a percentage stays similar, but the dollar amounts are smaller. If you did the exercise with your own 30% LTV numbers and got a different table — that is exactly as expected.

Profit source	Per year
Collateral interest (6%)	+$665
LP fees (30–68%)	+$960 — $2,172
Covered Call premium (~3%)	+$333
Total gross	+$1,958 — $3,170
Put Spread cost (3 cycles)	-$2,400
Debt interest (USDC ~6%)	-$282
Net	-$724 — +$488

Note: profit depends heavily on LP fees. At ~~68% LP fee APR (a 2026-09 instantaneous and highly variable figure) — the year is profitable (~~+$490/yr). Below ~53% LP APR the year is a loss — that's when you should cut protection costs. Every number in this table is historical and instantaneous; none of it is a promise or a forecast, and the real outcome can be negative.

Next step: Strategy B solves this problem — it optimizes each layer separately.

Once you've read through this playbook, you can break down any DeFi strategy into its separate layers yourself and figure out where every dollar of profit or cost comes from.

Quick check

How many income sources make up Strategy A?

Practice task

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Plan Strategy A on paper

Strategy A is a blueprint — so the task here is drafting, not building. No real trades: just paper, a calculator, and ~20 minutes.

This is learning, not investing — use only small amounts you treat as tuition.

You just put together a complete four-layer strategy blueprint and know exactly where it's profitable and where it isn't — most people never reach that level of clarity.

Portfolio delta Strategy B