USDC Basis: Your Go-To Strategy for Consistent Yield

4 min readDec 6, 2024

The USDC Basis strategy has achieved incredible success, making it a standout approach for earning yield in both bull and bear markets.

Let’s explore why this strategy is a game-changer and introduce an exciting NEW VAULT coming soon: USDC Basis (PerpsBasket).

Why Everyone Loves the USDC Basis Strategy

This approach is a yield-generating powerhouse, delivering consistent returns every hour. Unlike many other strategies, it shines in all market conditions. Whether it’s a bull or bear market, USDC Basis capitalizes on arbitrage opportunities with precision and low risk.

The secret sauce? It’s all about exploiting funding rate inefficiencies. For instance, analyzing SOL-PERP funding rates on Drift reveals some impressive stats:

Positive funding rates for 91.5% of the past year
An average annualized funding return of 30%

By arbitraging funding differences between assets, the strategy provides not just consistent yields but also ensures reduced risk through dynamic hedging.

How It Works: A Quick Breakdown

Basis trading involves capturing the price difference between an asset’s spot price and its futures price. In the USDC Basis strategy, this means:

Shorting multiple liquid PERPETUAL FUTURES CONTRACTS on Drift
Buying spot positions dynamically
Leveraging Sanctum Infinity ($INF) yield for extra profitability (For Sanctum-INF vault)

This combination delivers robust and stable yields through funding fees, amplified further by $INF returns.

Coming Soon: USDC Basis (PerpsBasket)

This variant applies the same winning principles across a diverse set of assets for even more stability and growth potential.

With this new product, we’re broadening the scope of our proven USDC Basis strategy. By spreading funds across multiple assets, USDC Basis (PerpsBasket) enhances resilience and minimizes risks, delivering consistently high returns.

Sanctum-INF vs. PerpsBasket

USDC Basis (Sanctum-INF)

This variant loops $INF yields while shorting SOL-PERP. Its execution adapts dynamically based on market conditions:

Positive funding: Focuses on basis trading and $INF loops.
Positive funding, but high SOL borrowing rate: Switches to basis trading alone.
Negative funding for 5+ days: The strategy continues $INF loops and reverse the basis positions.
Negative funding, but high SOL borrowing rate: Switches to basis trading alone.
Both conditions unfavorable: The strategy holds USDC.

USDC Basis (PerpsBasket)

This variant diversifies across multiple spots positions (cbBTC, ETH, jitoSOL, WIF, POPCAT) and perps on Drift, creating a basket of funding arbitrage opportunities. This ensures high, stable returns by spreading risk:

If one asset’s funding becomes unprofitable, the others in the basket maintain the strategy’s profitability.

Execution Logic:

Positive funding: Run the basis position.
Negative funding for 5+ days: Reverse the basis position.

The strategy ensures adaptability across market scenarios, leveraging dynamic hedging and diversification. By staying nimble and analyzing funding rates, the strategy reduces risk while maximizing returns.

What is Sanctum Infinity

Sanctum Infinity ($INF) is a curated basket of SOL-staked LSTs (Liquid Staking Tokens), designed to grow in value over time. Simply holding INF lets you earn passive profits, fueled by aggregated SOL staking yields, MEV opportunities and trading fees.