Reserve and hedge

The spot leg is tokenized ETFs on Solana. The short leg is an index perpetual on trade.xyz, on Hyperliquid, sized to the same dollar amount. When the index rises, the spot gains and the short loses the same amount; when it falls, the reverse. The pair stays at its dollar value while the market moves.

Each perp settles in USDC and runs on cross margin. Its oracle is the spot index during the cash session; outside it, the futures price adjusted by the recent difference between the two.

A short needs margin, and redemptions need cash on Solana. So for every dollar of USDq the reserve holds three things:

The shares follow from the leverage and the buffer. With spot S, leverage L and buffer B, all as shares of supply:

S + S / L + B = 1
L = 3, B = 0.1  →  S = 0.675

The index perps allow up to 50x on SP500 and 30x on XYZ100; the reserve uses 3x. On a 50x market the maintenance margin is 1% of the position, and a 3x short reaches it only after the index rises about 32%:

(1/3 − 0.01) / (1 + 0.01) ≈ 0.32

Every record S&P 500 move sits well inside that 32%:

Long before maintenance, at a rise of about 6.7%, leverage reaches the top of its band at 4x and the desk sends margin from the buffer.

Over weekends SP500's price stays within ±2% of its last price before the weekend.

Perps keep their price near the index through funding, paid every hour between longs and shorts. On trade.xyz funding runs at 0.5 of Hyperliquid's formula, and its baseline pays shorts about 5.5% a year. Across trade.xyz's perps the median has been 0.5 bps an hour.

The spot leg earns the ETFs' dividends. xStocks reinvest them, net of withholding, by raising their multiplier, so the vaults' value grows with no new tokens: about 0.7% a year for SPY. Yield and distribution turns both into sUSDq's share.

The hedge desk watches each pair. When a pair's spot value and short notional drift apart by more than 0.5% of supply, it resizes the short.

• An xStock mint adds spot at once. The desk opens the same short within seconds, from margin already waiting on Hyperliquid, and the hourly capacity bounds how much any hour can add.
• A USDC mint adds cash and no exposure. The USDC waits in the buffer until the desk turns it into spot and margin.
• Netting. xStock deposits bring spot and USDC deposits bring cash, so the desk trades only what is left over against the targets.

Hedge desk lists every loop and what the desk can and cannot do.

SPYx and QQQx are xStocks, tracker certificates on their ETFs issued by Backed Assets (JE) Ltd. The shares behind them are held in segregated accounts under an independent security agent. Jupiter Lend's risk report of 2026-04-15 names their custody and assurance:

Custodians

Alpaca Securities and InCore Bank

Custody insurance, aggregate

$175,000,000, Lloyd's of London

Proof of reserves

weekly, on chain

Assurance

quarterly, ISAE 3000

Token

Token-2022, 8 decimals

Dividends are reinvested and splits are applied through the multiplier, and raw balances never change. The program reads every xStock balance from its vault on every use and checks the mint's settings each time. Collateral handling lists each check.

The reserve keeps a cushion of 25 bps of supply before anything counts as surplus, and it is never distributed. Past it:

• The Reserve Fund: USDq set aside from fees and 10% of each distribution, up to 2% of supply. Its only way out is a burn that makes up a shortfall.
• The stAEQUA pool: staked AEQUA, with a backstop depth of 30% of its value.