The Universal Cashflow Engine

Jetty is a generalized cashflow delta engine. It prices a fixed rate against a floating rate using one formula:

floating_cashflow = notional * (current_index - last_index)

The program doesn't care what the index represents. Any data feed that can be expressed as a continuously accumulating index can be traded on Jetty. No changes to the core math or program required. Deploy a new market, supply a custom oracle feed, and you have a new swap product.

This architecture goes far beyond crypto rates. It unlocks traditional finance and exotic derivative markets natively on-chain.

1. Funding Rate Swaps

Perpetual futures funding rates are volatile by design. They fluctuate with leverage demand and can swing wildly in both directions. Jetty lets traders lock in a fixed funding rate against the realized floating rate.

• Oracle Feed: Cumulative funding rate from any perpetual futures venue.
• Who Benefits: Basis desks locking in carry, delta-neutral strategies that want predictable cashflows, and market makers hedging inventory funding costs.

2. Borrow Rate Swaps

DeFi borrow rates spike without warning. A leveraged yield strategy paying 3% can wake up paying 15% after a single liquidation cascade. Jetty lets borrowers fix their cost of capital.

• Oracle Feed: Cumulative borrow rate accumulator from lending protocols (Aave, Kamino, Marginfi, etc.).
• Who Benefits: Looping and leveraged yield strategies sensitive to borrow spikes, protocols managing treasury liabilities, and anyone running a strategy where the spread between earn and borrow is the margin.

3. Staking Yield Swaps

Staking yields vary with validator performance, MEV, and fee revenue. Jetty lets stakers swap their variable yield for a fixed payout, or speculators can take the other side betting yields will rise.

• Oracle Feed: Cumulative staking reward index (validator rewards plus fee and MEV variability).
• Who Benefits: Staking operators smoothing revenue, LST protocols offering fixed-yield products, and yield funds that want predictable distributions without unstaking.

4. Traditional Interest Rates (SOFR / OIS Swaps)

With LIBOR gone, the Secured Overnight Financing Rate (SOFR) is the global benchmark. Jetty can facilitate Overnight Index Swaps where one party pays a fixed APY and the other pays the floating, compounded daily SOFR rate.

• Oracle Feed: Compounded overnight SOFR as a cumulative index.
• Who Benefits: Institutions, DAOs, and corporate treasuries looking to lock in borrowing costs or hedge U.S. Treasury exposure.

Tokenized T-Bills require 100% upfront capital, are long-only, and carry heavy fiat custodian risk. Jetty OIS swaps are margin-based, bidirectional, and sever reliance on the traditional banking stack entirely.

5. Variance Swaps (Pure Volatility Trading)

A variance swap isolates and trades pure volatility, independent of an asset's price direction. This is an institutional staple that has never existed on-chain.

• Oracle Feed: Cumulative Realized Variance, the running sum of squared daily returns for an asset like BTC, ETH, or the S&P 500. Jetty's AMM fixed rate naturally acts as the implied variance strike.
• Who Benefits: Hedge funds, options market makers, and structured product providers.

The mechanics unlock strategies that are expensive or impossible with vanilla options:

• Delta-neutral volatility exposure without constant rebalancing of options straddles.
• Variance Risk Premium harvesting: systematically selling variance to capture the historical spread between implied and realized vol.
• Tail-risk hedging: portfolio insurance that pays out when volatility spikes during crashes.

6. Inflation and Macro Swaps (CPI)

Trading real-world purchasing power. Swap a fixed expected inflation rate against the actual realized CPI over the life of a contract.

• Oracle Feed: Cumulative Consumer Price Index.
• Who Benefits: Businesses managing supply chain costs, stablecoin issuers maintaining peg economics, and funds seeking a direct hedge against fiat inflation.

7. Continuous Prediction Markets and Exotics

Traditional prediction markets are binary. Yes or No. Jetty is built for continuous, accumulating metrics where the interesting question isn't if something happens but how much.

• Weather and Energy Swaps: Oracle tracks cumulative Heating Degree Days. Energy companies and agricultural operators hedge against unusually cold or warm seasons.
• Political Swaps: Track a cumulative delegate count or continuous polling aggregate rather than a binary election outcome.
• Total Return Swaps: Oracle tracks the cumulative total return (price plus dividends) of an equity index like the S&P 500 or Nasdaq.

Any metric that accumulates over time is a candidate for a Jetty market.