Basis Perpetuals

This perpetual contract tracks the short-term basis (premium / discount) between stETH and ETH, providing direct exposure to the relative value of staked ETH versus ETH.

Characteristic	Description
What it Tracks	The instantaneous premium or discount of stETH versus ETH, expressed as the stETH/ETH basis.
Index Definition	$X_{t} = 100 \times \left(\frac{p^{\text{stETH}}_{t}}{p^{\text{ETH}}_{t}} - 1\right)$ Where ptstETH and ptETH are the mid-quotes (or robust TWAP mids) of stETH and ETH from the reference markets. Xt is measured in percentage points of basis (e.g., Xt = 2.0 ↔ 2% premium).
Oracle Type	A 24/7 crypto oracle that computes the stETH/ETH basis from a composite of stETH and ETH price feeds, with robust aggregation and band-limiting during stressed or illiquid conditions.
Market Type	Cash-Settled Index Perpetual.
PnL Formula	• PNL (Long) = (Exit_Price - Entry_Price) × Position_Size + Total_Funding_Received • PNL (Short) = (Entry_Price - Exit_Price) × Position_Size + Total_Funding_Received Where: • Entry_Price / Exit_Price: The price at which a position is opened and closed, respectively. • Position_Size: The number of BASIS contracts in a position. • Total_Funding_Received (or Total_Funding_Paid): The sum of all hourly funding payments accrued over the duration of the position. This value can be positive (if a user were paid by the other side) or negative (if the user paid the other side).
Use Cases	Long (Bet on stETH premium widening): • Hedge a portfolio that is short stETH and long ETH (or synthetically short the basis) by going long BASIS to profit if the stETH premium increases. • Express a view that staking yield, liquidity preference, or redemption dynamics will cause stETH to trade at a higher premium relative to ETH. Short (Bet on discount / premium compression): • Hedge a portfolio that is long stETH and short ETH by going short BASIS to protect against the stETH discount widening. • Express a view that current stETH premium is unsustainably high and will compress back toward parity (or a discount) versus ETH.
Users	• LST protocols, treasuries, and DAOs managing stETH and ETH balances (Hedgers) • Basis and relative-value funds (Speculators) • Sophisticated retail traders with familiarity in LST basis markets
Vol-stat (σ)	Medium–High: the BASIS product can experience sharp moves during depeg events, liquidity shocks, or large flows between stETH and ETH, even when ETH/USD itself is relatively stable. Risk parameters are set accordingly, with conservative leverage compared to standard ETH perps.
Margin Numbers	Derived from the Max Leverage tiers. For the initial 3x leverage tier, the Initial Margin (IM) is ~33.3% of the notional position value.

See additional market mechanics and parameters