Active Basis & Active Basis Plus — Allocator FAQ | Active Digital Asset Management
Allocator FAQ for Active Basis and Active Basis Plus funding rate arbitrage strategies. Counterparty risk management, operational structure, and investor access. For Qualified Investors Only.
Funding rates are compressing — won't returns decline?
Even as crypto markets mature and funding rates normalise, the strategy remains attractive because it is designed to stay market-neutral and capital-efficient across a range of funding environments. The strategy's market-neutral construction means drawdowns do not depend on market direction, and its low correlation to broad crypto beta remains a key differentiator.
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 through multiple major crypto dislocations, including the 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 is designed to keep harvesting funding differentials even during periods of severe market stress.