WEEKEND MATH The @protocol_fx BTC basis trade trumps the wstETH basis trade BY A FACTOR OF THREE. The wstETH Basis Trade: ► Long wstETH ► 2x Short notional wstETH value in ETH Example: $10,000 wstETH: +2.8% APR (+$280) $5,000 Margin 2x Leverage: +5% APR (+$250) Principal: $15,000 Yearly Yield: $530 Effective APR: 3.5% Delta Neutral The f(x) BTC Basis Trade ► 2x Long BTC (no funding / no interest) ► 2x Short BTC (+20%) Example: $7,500 Margin 2x Long: 0% APR (+0) $7,500 Margin 2x Short: +20% APR (+$1,500) Principal: $15,000 Yearly Yield: $$1,500 Effective APR: 10% Delta Neutral Notes: ➢ ETH Funding Rate is averaging 2.5%, at 2x leverage, that's 5% on the principal. ➢ Likewise, BTC funding is averaging 10%, at 2x leverage, that's 20% on the principal. ➢ There is a ONE TIME 0.3% fee on the notional to open and a 0.1% fee on the notional to close on f(x). At 2x Leverage, that's 0.8% on the principal for entry and close. At 10% APR, that would take 15 days before being all profits.