Crypto Yield Sources and Cash-and-Carry Arbitrage
Summary
The document surveys several ways to seek returns in cryptocurrency markets: lending assets through deposit products, supplying liquidity to earn fees, collecting perpetual-futures funding, trading price differences between contracts with different maturities, and participating in exchange token activities. It also outlines moving between fiat and stablecoins through over-the-counter transactions. Its most clearly described trading setup is a cash-and-carry position: buy the asset in the spot market and short a more expensive dated futures contract, then close the legs if their prices converge. It recommends using software to monitor the spread over time.
The material gives illustrative funding-rate ranges and a historical high, but supplies no backtest, trade records, or evidence for the headline annualized return claim. These approaches carry distinct risks: lending and liquidity provision involve counterparty or protocol exposure, funding can change sign, and futures spreads may widen or fail to converge on schedule. Fees, financing, collateral, execution, and liquidation risk can also erode returns. The examples are conceptual and do not establish that any route is low risk or reliably profitable.
Key ideas
- Crypto yield may come from lending, liquidity provision, perpetual funding, or exchange incentives.
- Positive perpetual funding means longs pay shorts, while negative funding reverses the payment direction.
- A cash-and-carry trade pairs a spot purchase with a short in a more expensive dated futures contract.
- Software can monitor contract spreads and help coordinate entry and exit decisions.
- The document provides no performance study, and the described routes retain market, counterparty, and execution risks.
Tags
From a private course collection; the original is not published.