Basis Trading Tool

Basis trading, also known as cash-and-carry, is a popular trading strategy that benefits from the price difference between spot and perpetual markets. Because perpetual markets sometimes trade at a premium or discount to the underlying spot price, traders can take offsetting positions between the two and profit from funding rates. As an example, if the price of ATOM-USD on dYdX is trading above the price of ATOM-USD on Osmosis, and the dYdX market has a positive funding premium, traders can buy ATOM on Osmosis and sell the same amount on dYdX. Through these two trades, the trader has no exposure to price but earns funding interest from the short position on dYdX.

We would like to build a tool that lets users find and execute basis trading opportunities on dYdX and a Cosmos-based spot platform (e.g. Osmosis). The tool should execute both trades simultaneously, allow users to track their profitability, and make existing the two positions simple.

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