Active Basis & Active Basis Plus — Allocator FAQ | Active Digital Asset Management
Allocator FAQ for Active Basis and Active Basis Plus funding rate arbitrage strategies. Performance data, counterparty risk management, and track record. For Qualified Investors Only.
Funding rates are compressing — won't returns decline?
Even as crypto markets mature and funding rates normalise, the strategy continues to deliver. At a normalised 10–15% annualised return, the risk-adjusted profile remains exceptional. The strategy's market-neutral construction means drawdowns remain minimal regardless of where funding rates settle. A 10–15% return with a 3+ Sharpe ratio and near-zero correlation to crypto beta is extremely difficult to find in digital assets or traditional markets.
What's the difference between Active Basis and Active Basis Plus?
Both strategies share the same core funding rate arbitrage engine. Active Basis Plus trades coin-margined contracts where yield is paid in the underlying asset (e.g. BTC). The team chooses to hold that underlying rather than converting to USD, creating a natural directional component. Both run automated execution with human oversight. Basis Plus has a wider daily volatility range and a higher minimum investment ($5M vs $1M), suitable for allocators who want funding rate yield with modest crypto beta.
Your capital sits on centralised exchanges — what about counterparty risk?
Exchange counterparty risk is managed actively across multiple dimensions: multi-venue diversification limiting single-venue exposure, per-exchange exposure limits enforced systematically, continuous exchange wallet monitoring for early warning signs, auto-deleveraging protocols to reduce exposure when risk signals trigger, and off-exchange custody available when clients request it.
What's your track record through market dislocations?
Active Basis has operated continuously for over 50 months, spanning the full 2022 bear market, Luna/Terra collapse, and FTX insolvency. The strategy's single meaningful drawdown occurred during FTX, when the team switched to majority market orders to exit the exchange as quickly as possible — a costly decision in the moment, but the right one in hindsight. The strategy continued generating positive returns while crypto markets fell 70%+.