BTC Basis Trade

Capture basis spread between spot and futures markets.

Strategy Overview

Metric	Value
Current APY	22.5%
Risk Level	Low
Min Deposit	0.01 BTC
Chain	Ethereum
TVL	$9.6K
Depositors	14
Performance Fee	15%
Management Fee	2%

Key Details

Parameter	Value
Capacity Used	32%
Lock Period	None
Inception Date	Feb 1, 2024
Category	Neutral

How It Works

This strategy exploits the basis spread between Bitcoin spot and futures markets. By simultaneously holding BTC spot and shorting BTC futures, the strategy captures the funding rate differential while remaining market-neutral. The position is rebalanced automatically to maintain delta neutrality.

The Basis Spread

In crypto markets, futures contracts often trade at a premium to spot prices. This premium, called the "basis," represents the cost of carry and market sentiment.

Example:

• BTC Spot Price: $60,000

• BTC 3-Month Future: $61,500

• Basis: $1,500 (2.5%)

The Trade

1. Buy Spot BTC - Acquire Bitcoin at current market price

2. Short Futures - Sell equivalent BTC futures contracts

3. Collect Premium - As futures converge to spot at expiration, capture the basis

4. Roll Positions - Repeat with new futures contracts

Market Neutrality

Since we're long spot and short futures in equal amounts:

• Rising BTC: Spot gains offset futures losses

• Falling BTC: Futures gains offset spot losses

• Result: Profit from basis, regardless of direction

Protocol Allocation

Protocol	Allocation	Purpose
Binance	45%	Primary futures venue
dYdX	30%	Decentralized perps
Bybit	25%	Additional exposure

Historical Performance

APY Trends (Weekly)

Date	APY
Oct 29	20.1%
Nov 5	21.3%
Nov 12	22.9%
Nov 19	22.5%

Performance Context

The strategy has historically performed well during:

• Bull markets with high basis premiums

• Periods of high trading volume

• Times of strong futures demand

Returns may be lower during:

• Bear markets with flat or negative basis

• Low volatility periods

• Reduced institutional participation

Smart Contracts

Contract	Address
Vault Contract	0x2345...6789
Strategy Contract	0xbcde...f012

Risk Factors

Market Neutrality The long spot + short futures position eliminates directional market risk. Whether BTC goes up or down, the net P&L remains stable.

Exchange Risk

Positions are held on centralized exchanges for futures access. We mitigate this by:

• Diversifying across multiple exchanges

• Limiting exposure per platform

• Regular profit sweeps to cold storage

Funding Rate Risk

Negative funding rates can reduce profitability. Our strategy:

• Monitors funding rates continuously

• Adjusts position sizing based on conditions

• May temporarily reduce exposure during unfavorable periods

Liquidation Risk

Extreme market moves could impact leveraged positions. Safeguards include:

• Conservative leverage (typically 1-2x)

• Automated deleveraging triggers

• Sufficient margin buffers

Basis Compression

The basis spread can narrow, reducing returns. We manage this by:

• Active monitoring of basis levels

• Flexible entry/exit timing

• Diversification across expiration dates

Fees

Performance Fee: 15%

Charged only on profits. If you earn $100 in yield, $15 goes to the protocol and you keep $85.

Management Fee: 2% Annual

Covers operational costs, gas optimization, and ongoing strategy maintenance.

The displayed APY of 22.5% is net of all fees. What you see is what you earn.

Who Should Consider This Strategy

Ideal for:

• Investors seeking consistent returns with low risk

• Those comfortable with exchange counterparty risk

• BTC holders wanting yield without selling

May not suit:

• Those requiring guaranteed returns

• Investors uncomfortable with any centralized exchange exposure

Getting Started

1. Visit the BTC Basis Trade strategy page

2. Click "Connect Wallet"

3. Enter deposit amount (minimum 0.01 BTC)

4. Review estimated returns and fees

5. Click "Deposit" and approve transaction

6. Your position starts earning immediately!

FAQ

What happens if BTC crashes 50%?

The delta-neutral structure protects you. Your long spot position loses value, but your short futures position gains equally, resulting in net neutral P&L. You continue earning from the basis spread.

Can I withdraw anytime?

Yes! There are no lock-up periods. Withdrawals typically process within 5-10 minutes as positions are unwound.

Why use centralized exchanges?

BTC futures liquidity is deepest on centralized venues. We diversify across Binance, dYdX, and Bybit to minimize single-exchange risk while accessing optimal execution.

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