Project Update: Multi-Exchange Launch & Opportunities

Project Update: Multi-Exchange Launch & Opportunities
Breaking down barriers to optimise directionless trading in the cryptocurrency market.

Welcome to the latest update from the Basis Markets DAO.

The year 2024 continues to be unexpected, with inflation starting to temper again after some hot readings in Q1,  stock indices closing at record highs, and economic data pointing towards interest rate cuts still being on the cards for this year.

Crypto has been on it's own, separate but correlated, journey and remains around previous all-time highs, and there continue to be opportunities in funding rate arbitrage in various pockets of the market.

The Basis Market DAO has been busy during this time and this blog provides a product update on recent additions within the Basis Trade eXecutor (BTX).

Recent Milestone: BTX focus

We’re thrilled to announce that Bybit, Kucoin and Binance are now integrated with the BTX.

This opens a new world of trading opportunities for our users, allowing them to seamlessly execute trades across multiple exchanges, and negating many of the common issues that basis traders will face when attempting to efficiently execute such trades.

The new BTX infrastructure is designed to enhance trading efficiency, transparency, and user experience, providing real-time updates on position status, fees, and orders. The BTX is already being used by many NFT holders, and will be opened to the public later this year, so all traders will be able to utilise the $BASIS token to power the engine and execute on these opportunities.

Let’s delve into the details of our recent progress and upcoming plans, and why multi-exchange trading is a game-changer for basis traders and crypto arbitrage opportunities more generally.

The Power of Multi-Exchange Basis Trading

Basis trading can be executed on a single exchange, for example, by opening a long spot and short perpetual position. However, using only one exchange missed the chance for greater opportunities when using multiple exchanges.

Access to Greater Opportunity:

The main advantage of cross-exchange basis trading is that a trader gains access to opportunities that would not be available OR that would simply be too difficult to execute manually, otherwise.

Trading on multiple exchanges allows users to take advantage of funding and price discrepancies between platforms. Exchange participants can be lazy or ignorant to funding discrepancies at other venues and that’s where there lies an extra opportunity for basis traders.

Cross-exchange delta-neutral trading can also use Long/Short strategies where you take a perpetual position on two exchanges in an opposite direction, allowing effective use of capital and the opportunity for funding payments on both exchanges simultaneously.

Risk Diversification:

Each exchange has its own set of risks, such as technical issues or regulatory challenges. Spreading trades across multiple platforms helps mitigate the risk of any single exchange experiencing problems that could affect trading activities.

Multi-exchange trading also ensures that traders can access a wider range of assets and markets, reducing the risk of missing out on profitable trades due to limited market coverage.

Improved Trade Execution:

By splitting orders across multiple exchanges, traders can achieve better order matching and execution prices. This is especially important in volatile markets where large orders can significantly impact the price on a single exchange.

Each exchange has its own order matching engine and precision limitations on trading pairs. Multi-exchange trading helps balance these limitations, optimizing trade sizes and execution.

The Complexity of Basis Trades

Basis trading involves capturing the price difference between the spot and futures markets. While it can be highly profitable, executing basis trades manually is challenging for several reasons:

Precision and Timing:

Basis trades require real-time monitoring of price movements across spot and futures markets. The timing of trade execution is crucial to capture the price spread, which can change rapidly.

Exchanges work with limited precision on base and quote pairs, which differ per pair. Adjusting order sizes to match these precision requirements manually can be cumbersome and error-prone.

Execution Speed:

Crypto markets are known for their high volatility. Executing trades quickly across multiple exchanges to capitalize on basis spreads is difficult without automated tools. Thus, basis trades often require simultaneous execution of multiple orders to lock in the spread. Coordinating this manually can be very difficult.

Operational Efficiency:

Trading across multiple exchanges requires managing multiple accounts, each with its own set of API keys, security measures, and operational procedures. This adds to the complexity and increases the risk of errors.

Adding to this, continuously tracking open positions, adjusting for changes in market conditions, and managing orders efficiently is a demanding task when done manually.

The BTX minimises these issues and optimises basis trading for both the beginner and advanced trader.

There’s been a lot of progress on the way to public launch but the BTX is currently only accessible to those who hold a Basis Markets NFT.

You can find out more about the project and how you can get access via holding a Basis NFT in the product documentation here and here.

Key Developments

Our development team has successfully integrated multi-exchange trading with KuCoin, Binance, and Bybit. This integration allows users to take advantage of arbitrage opportunities and optimize their trading strategies across different platforms.

The 0.5.0-beta version marks a significant milestone with the launch of multi-exchange basis trading, funding arbitrage, and reverse basis trades.

New data collection infrastructure ensures the latest opportunities are captured. Optimized execution algorithms and trading fee optimizations provide greater flexibility and efficiency.

A notable advancement with the new BTX is the ability to integrate new exchanges much more quickly. The code paradigm allows for the addition of new trading venues (exchange or on-chain) within a much shorter timeframe. This rapid integration is supported by the backend infrastructure, which has been modularised with an abstraction layer to accommodate for the varying requirements of each exchange that is integrated.

Integrations (both of data and execution capabilities) had been a challenge requiring significant manual work previously, but has now become a superpower for the development team.

User Engagement and Testing

NFT owners are encouraged to participate in testing and provide feedback. Regular updates and bug fixes and enhancements are being rolled-out regularly to ensure a seamless transition to public launch.

An important note, we take security seriously and are implementing measures to protect our community from scams. We urge users to verify communication from official team members and avoid clicking on suspicious links.

We will never direct message you or provide you with links in Discord, other than the official basis markets domain.

You can always find the latest official links in the project's documentation on GitBook here.

How to Get Involved

If you’d like to hear more frequent updates and keep up to date with upcoming plans, please join us in the Basis Markets Discord.

NFT holders can access the members-only area of the discord, where they can find more detail on the development of the BTX, get involved in product-related discussions, and contribute to the DAO. Find out more in the Discord Community section of the Gitbook here.

Thank You

The Basis Markets team is excited about the progress made and the future developments planned. We appreciate the community’s patience and support as we work towards delivering a robust and user-friendly platform.

For detailed updates and to participate in our community, stay tuned on the Basis Markets Blog and join our Discord.

Thank you for supporting of Basis Markets DAO.

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