System architecture — how it all fits into one machine
After this module
You'll learn to combine lending, an LPLPLiquidity Provider — deposits tokens into a pool and earns a share of trading fees.Read the lesson → ladder, and options into one dynamic system with clear rotation rules — one that covers its own costs and naturally accumulates SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson → even as the market swings.
What is this module about?
Dynamic position management is a system that combines three tools you already know (lending, LPLPLiquidity Provider — deposits tokens into a pool and earns a share of trading fees.Read the lesson →, options) into one working mechanism with clear rotation (moving capital between layers) rules.
The difference from Strategy B (Module 5.3): this framework doesn't just hold a position — it actively rotates as the price moves, letting capital keep working even while the market chops sideways.
Main idea
LPLPLiquidity Provider — deposits tokens into a pool and earns a share of trading fees.Read the lesson → yield is actually two streams:
- USDC fees cover the options' theta (the weekly "insurance" cost)
- SOL fees + range mechanics naturally grow your SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson → amount
The system becomes self-funding in cash (USDCUSDCA USD stablecoin issued by Circle. Regulated, audited monthly. Our primary stablecoin and loan asset in the Kamino/Aave strategies.Read the lesson →) and compounding in SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson →.
Three layers
Layer A — Lending (Kamino) SOL
- 80 SOL collateral
- $3,400 USDC loan (50% LTVLTVLoan-to-Value — the ratio of debt to collateral value. LTV 30% is considered safe. LTV 71%+ triggers liquidation.Read the lesson →)
- 5% supply APYAPYAnnual Percentage Yield — the annual interest rate WITH compounding. Always higher than the equivalent APR.Read the lesson → on SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson → · 5% borrow APRAPRAnnual Percentage Rate — the annual interest rate WITHOUT compounding. 10% APR = +10% per year.Read the lesson → on USDCUSDCA USD stablecoin issued by Circle. Regulated, audited monthly. Our primary stablecoin and loan asset in the Kamino/Aave strategies.Read the lesson →
Layer B — LP ladder — staggered liquidity positions (Orca)
3 narrow $5-wide ranges:
- $75–$80 (lower, 100% USDCUSDCA USD stablecoin issued by Circle. Regulated, audited monthly. Our primary stablecoin and loan asset in the Kamino/Aave strategies.Read the lesson → at a $85 price)
- $80–$85 (active, mixed)
- $85–$90 (upper, 100% SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson →)
~$867 of capital in each — fees are generated only in the active tier (the tier matching the current price range).
Layer C — Options hedge / protection (Deribit)
PUT spread:
- Long $90 PUT (protection)
- Short $70 PUT (lowers the cost)
- 120 days to expiry, 100 contracts = 100 SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson → of protection (1 DeribitDeribitA crypto options exchange. In our strategy this is where we buy put protection and sell covered calls.Read the lesson → SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson → contract = 1 SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson →)
Capital allocation
Why 3 tiers, not 1 wide LP?
| Option | Problem |
|---|---|
| Wide LPLPLiquidity Provider — deposits tokens into a pool and earns a share of trading fees.Read the lesson → $70–$90 | Capital is spread thin — fees only accrue at the active tick, the rest just pays interest |
| Narrow LPLPLiquidity Provider — deposits tokens into a pool and earns a share of trading fees.Read the lesson → $80–$85 | Any move → 100% SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson → or 100% USDCUSDCA USD stablecoin issued by Circle. Regulated, audited monthly. Our primary stablecoin and loan asset in the Kamino/Aave strategies.Read the lesson →, fees stop |
| 3 tiers of $5 | The active tier works like a narrow LP, the side tiers act like pre-positioned limit orders |
If the price moves $5, you already have a structure ready — you just close one tier and open the next. No panic, no slippage (price movement during execution) spikes.
Advantages and constraints
Advantages
- Self-funding — LPLPLiquidity Provider — deposits tokens into a pool and earns a share of trading fees.Read the lesson → USDCUSDCA USD stablecoin issued by Circle. Regulated, audited monthly. Our primary stablecoin and loan asset in the Kamino/Aave strategies.Read the lesson → fees cover the options' theta
- Natural SOL accumulation through the range mechanics
- Disciplined risk — the options hedge stays on even if the price drops to $70
- Clear triggers — decisions without emotion
- Not a passive strategy → you set aside ~1 hr/week for monitoring, and that's enough to keep the system running smoothly
- Sensitive to LP APR and Kamino rate changes → you watch both numbers and rotate capital when they shift
- Requires knowing how to manage LP, options, and lending → you've already covered all three in Modules 3-5, now you combine them
Every risk has a fix. You don't fear it — you learn to manage it.
Next steps
In the next section we'll dig into the math: how LTVLTVLoan-to-Value — the ratio of debt to collateral value. LTV 30% is considered safe. LTV 71%+ triggers liquidation.Read the lesson → is calculated, when rebalance triggers fire, and how the USDCUSDCA USD stablecoin issued by Circle. Regulated, audited monthly. Our primary stablecoin and loan asset in the Kamino/Aave strategies.Read the lesson → flow covers the options' cost.
A three-layer system only becomes clear once you see it with your own numbers. This task needs just a sheet of paper and ~15 minutes — no trades.
This is a paper planning task — don't open any real positions. Module 7 is for advanced users who've already mastered Modules 3-5.
This is learning, not investing — use only small amounts you treat as tuition.
You just sketched a full system architecture with your own numbers — most people never think about three connected layers, and you already see them in one diagram.