six
@six
anybody got good insights on implications of current happenings in the bond market
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horsefacts
@horsefacts.eth
Two good explainers on the “basis trade” https://archive.is/JP09k https://archive.is/Szzi5
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horsefacts
@horsefacts.eth
You buy a spot treasury and short a futures contract on it and hold them both until the futures settle. When they settle they converge to the same price. So you’re guaranteed the difference, the “basis.” (As long as it doesn’t blow up) In crypto terms it’s very similar to USDe: Ethena is basically a basis trade turned into a stablecoin.
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