Treasury & Trading

How Silverback manages capital and generates returns.

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Treasury Overview

Silverback maintains an on-chain treasury that:

• Provides capital for trading operations

• Funds liquidity provision

• Generates returns for $BACK holders

• Operates transparently on Base

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Trading Strategies

Silverback employs multiple strategies to generate returns while managing risk.

Strategy Categories

Strategy	Description	Risk Level
Cross-Chain Arbitrage	Exploit price differences between networks	Low
Liquidity Provision	Earn fees from DEX pools	Low-Medium
Perpetuals Trading	Systematic futures strategies	Medium
Liquidity Sweeps	Capture inefficiencies in order books	Medium

Strategy Selection

The agent selects strategies based on:

• Current market conditions

• Available opportunities

• Risk budget remaining

• Portfolio balance

Not all strategies are active at all times. Silverback adapts to market conditions.

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Risk Management

Core Principle

Capital preservation comes first.

Silverback would rather miss opportunities than take losses that damage the treasury.

Position Sizing

Rule	Implementation
Max per trade	2% of treasury
Max correlated exposure	Limited
Diversification	Across strategies and assets

Stop Losses

Every position has defined exit criteria:

• Price-based stops

• Time-based stops

• Volatility-adjusted stops

• Portfolio-level circuit breakers

Drawdown Management

If treasury drawdown exceeds thresholds:

1. Reduce position sizes

2. Pause higher-risk strategies

3. Focus on capital preservation

4. Resume normal operation when recovered

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Cross-Chain Arbitrage

How It Works

Operating on both Base and Keeta creates arbitrage opportunities:

Price on Base: 1 TOKEN = $100
Price on Keeta: 1 TOKEN = $102

→ Buy on Base, sell on Keeta
→ Capture $2 spread minus fees

Advantages

• Low risk — Price discrepancies are factual

• Fast execution — Keeta's 400ms settlement

• Atomic when possible — Reduce execution risk

• Consistent returns — Small but frequent profits

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Liquidity Provision

DEX Liquidity

Silverback provides liquidity to its own DEX:

• Earns swap fees on trades

• Maintains healthy pool depth

• Attracts more traders

• Creates positive flywheel

Strategic Positioning

• Focus on high-volume pairs

• Optimize fee tiers (V3)

• Rebalance based on market conditions

• Monitor impermanent loss

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Perpetuals Trading

Platform

Silverback uses Avantis for perpetuals:

• Zero fees on profitable trades

• Strong backing and liquidity

• Base network native

• Suitable for systematic strategies

Approach

• Systematic, not discretionary

• Defined entry/exit criteria

• Strict position limits

• No overleveraging

Risk Controls

Control	Implementation
Max leverage	Conservative limits
Position size	Fraction of treasury
Stop loss	Always defined
Correlation	Monitor exposure overlap

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Performance Reporting

What's Shared

• Treasury balance — Current value

• Period returns — Weekly/monthly performance

• Win rate — Percentage of profitable trades

• Drawdown — Maximum decline from peak

• Revenue generated — Contributing to buybacks

What's Not Shared

• Specific positions in real-time

• Exact entry/exit prices

• Proprietary signal logic

• Upcoming trades

Why This Balance?

Full transparency on positions would:

• Allow front-running

• Eliminate strategy edge

• Reduce returns for holders

Sharing results without methods provides accountability while maintaining profitability.

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Treasury Allocation

General allocation framework:

Category	Purpose
Trading Capital	Active strategy deployment
Liquidity Reserves	DEX pool provision
Stable Buffer	Risk management cushion
Buyback Reserve	Accumulated for distributions

Exact allocations vary based on market conditions and opportunities.

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Profit Distribution

When trading generates profits:

1. Profits accumulate in treasury

2. Buybacks execute — Purchase $BACK from market

3. Staking pool fills — Tokens added to rewards

4. Stakers earn — Distributed proportionally

See Revenue Sharing for full details.

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Track Record

Performance metrics will be published regularly once trading operations are fully active.

Key metrics to watch:

• Cumulative returns

• Sharpe ratio (risk-adjusted returns)

• Maximum drawdown

• Win rate by strategy

• Revenue generated for buybacks

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FAQ

Is the treasury audited? Treasury is on-chain and publicly viewable. Third-party audits may be conducted for smart contracts.

What if there are losses? Losses reduce treasury and buyback capacity but don't create obligations. Risk management limits downside.

Can I see all trades? Completed trades are visible on-chain. Real-time positions are not disclosed to protect strategy edge.

How conservative is the trading? Very. 2% max per trade, diversified strategies, strict stops. Preservation over aggression.