This page explains everything in plain English — no assumed knowledge, no jargon without explanation. It covers both how you earn and how you could lose money. Read it before depositing anything.
Before you go further: BasisYield is not FDIC insured, not regulated, and carries real platform risk from Hyperliquid — a protocol that launched in 2024. The ~24% APY is a backtest result, not a guarantee. Read this page fully before deciding whether to participate.
This page explains BasisYield in plain English — no assumed knowledge, no jargon without explanation. If something still doesn't make sense, that's a gap in our writing, not a gap in your knowledge.
The honest version of what we do: this is a yield-generating strategy that runs on a decentralized exchange. It is not FDIC insured, not regulated, and carries real risks that a savings account does not. That's also why the returns are higher. Read this page before depositing anything.
If you want the full technical picture after reading this, the strategy page has the complete mechanics, and the technical reference covers the protocol details for sophisticated readers.
You don't need to understand perpetual futures in depth. You need to understand this one mechanism.
A funding rate is a periodic fee that leveraged traders on perpetual-futures exchanges pay to keep their positions open. Think of it like rent: if most traders are betting the same direction (usually long, using leverage), the exchange charges the crowded side a fee every 8 hours and pays it to whoever is on the quiet side.
BasisYield holds positions on both sides of the same asset simultaneously — one position on each of two exchanges — so the price move on one leg cancels the other. What remains is the periodic fee collected from the crowded side, delivered to your wallet continuously, without taking a directional price bet.
What is a "perpetual futures contract"? It is a way to bet on the price of an asset without actually owning it. Think of it like sports betting — you can wager that gold will go up without buying any gold. These contracts are "perpetual" because they never expire. They exist on exchanges like Hyperliquid. You don't need to understand the mechanics deeply. What matters is the side effect they create: the funding rate.
Imagine a busy highway where most drivers want to go north. To prevent congestion, the highway authority charges northbound drivers a small toll every 8 hours and pays it to southbound drivers. You earn money just for driving south — regardless of where you actually end up. BasisYield does the same with financial positions. The toll is paid by real leveraged traders, on a real exchange, as a built-in mechanism of how the market functions. It is not a promotional bonus or a manufactured yield.
This fee is not paid by the platform out of its own pocket. It is paid by real leveraged traders, on a real exchange, as a built-in mechanism of how the market functions. It is a genuine economic activity — not a promotional bonus or a manufactured yield.
The similarities: both generate regular income on a cash-like starting position. Both allow you to withdraw. Both are denominated in dollars (your starting capital is in USDC, a dollar-pegged token explained below).
The differences matter more.
The extra yield — roughly 19 percentage points above a savings account — is compensation for accepting those additional risks. There is no free lunch. If someone offers you 24% with no additional risk versus a savings account, they are either wrong or lying. Here we are telling you directly: the additional yield comes with additional risk, and the most serious risk is the platform risk of Hyperliquid itself.
The right question to ask yourself: "If Hyperliquid failed completely tomorrow and I lost everything here, would that be devastating to my finances?" If the answer is yes, this is not the right place for that money. Only allocate what you can genuinely afford to lose entirely.
Hyperliquid is the exchange where your funds sit and where the trades execute. Understanding it matters because it is the primary source of platform risk in this strategy.
What it is: Hyperliquid is a decentralized perpetual-futures exchange. "Decentralized" means it runs on blockchain software rather than being operated by a single company in the traditional sense. Your USDC sits in your own wallet and is not deposited with a custodian — BasisYield cannot access it to withdraw it. The exchange runs on its own blockchain (HyperEVM) with its own set of validator nodes.
What it is not: It is not a regulated exchange like Coinbase or Nasdaq. It did not exist before 2024. It does not have FDIC insurance, SIPC protection, or any equivalent. It has never been through a full market cycle or a serious financial crisis.
Why it matters: BasisYield's strategy runs entirely on Hyperliquid. A serious exploit, governance failure, or regulatory shutdown of Hyperliquid would be a direct risk to your capital. This is the most significant unhedgeable risk in this strategy.
What the track record looks like: Hyperliquid handled a significant stress event in March 2025 (a large position liquidation that briefly caused a $4M insurance fund loss). The exchange remained operational. This is a data point, not a guarantee — but it is relevant context. As of June 2026, Hyperliquid's open interest has exceeded $8B at peak. It is not a tiny experiment, but it is also not a 30-year institution.
What the design protects you from:
What the design cannot protect you from:
No — not directly, and this is one of the most important properties of the strategy. Here is why:
For every asset BasisYield trades, it holds two positions: one on markets.xyz and one on trade.xyz — both on Hyperliquid, but in opposite directions. If EUR (Euro) goes up by 2%, the long position gains 2% and the short position loses 2%. They cancel. The net price exposure is approximately zero.
This is called market-neutral. The strategy is not betting on prices going up or down. It is collecting the fee that leveraged traders pay regardless of direction.
The nuance: "approximately zero" is not the same as "exactly zero." During extreme volatility, the two positions can briefly drift out of sync before the rebalance alert fires. This causes temporary mark-to-market losses. These typically resolve as prices stabilize — but in a true market crisis, they could persist longer.
The weekend harvest sleeve (which runs on Friday–Sunday) does hold a single unhedged position. This one is directional: if you're long gold over the weekend and gold crashes 15%, you lose 15% on that position (multiplied by leverage). The position size for this sleeve is limited, and the kill-switch pauses it during stressed conditions. But it is not market-neutral, and the strategy page says so clearly.
The Sharpe ratio measures how much return you get for each unit of risk you take. A higher number is better.
A Sharpe of 2.80 means the strategy produced about 4× the return per unit of risk as the typical hedge fund, in our 142-day backtest. That is a genuinely strong number — not a fabricated one. It comes from the market-neutral structure: because price risk is largely cancelled, most of the return comes from the predictable hourly funding payments rather than volatile price swings.
The honest caveat: 142 days is a short track record. A Sharpe of 2.80 over 142 days in a specific market regime could look worse over a longer period or in a different regime. It is the best estimate we have given the data that exists — these venues only launched in January 2026.
One important property: the Sharpe ratio is constant regardless of leverage. Increasing leverage increases both return and volatility proportionally. This means the choice of 5× leverage does not improve or worsen the Sharpe — it only changes how much collateral headroom you have before a rebalance is needed.
APR (Annual Percentage Rate) is simple annual interest — the fee you earn in a year, expressed as a percentage, without reinvesting. APY (Annual Percentage Yield) is the same thing with compounding — what happens if you reinvest your earnings continuously.
The 22% APR and 24% APY figures in our backtest are already net of fees — they include trading costs. The builder fee (~$1.28/year on $100) is also taken from trade notional, not your starting capital directly. The example above separates these to be transparent, but the backtest APY of ~24% is the bottom-line number after all costs.
This example assumes rates stay constant. In reality, funding rates change every 8 hours. Some periods will be above this; some will be below. The backtest average is what the historical data shows — not a promise for next year.
When you connect your wallet to BasisYield, you are asked to authorize an "agent key." This is the most important security concept to understand.
What it is: An agent key is a limited permission that allows BasisYield's software to place and cancel trades on your Hyperliquid account. Think of it like giving a stockbroker permission to make trades in your brokerage account, while keeping the account itself in your name.
What it can do: place orders, cancel orders, view positions.
What it cannot do: withdraw funds, transfer funds, change your account settings, or access any other wallet or account. This restriction is enforced by the Hyperliquid exchange protocol — not by a promise from us, not by our terms of service. The exchange literally rejects any withdrawal attempt from an agent key, regardless of who holds it.
How to revoke it: Go to your Hyperliquid account settings and remove the agent key. Takes 30 seconds. BasisYield is immediately and completely disconnected — no notification to us required, no waiting period.
The bottom line: the worst thing an attacker who gained access to BasisYield's systems could do with your agent key is make trades on your account. They could not steal your funds. This is a meaningful security property — but it does not eliminate all risk, because bad trades can cause losses.
USDC is a "stablecoin" — a token designed to always be worth exactly $1. It is issued by Circle, a regulated US financial company, and is backed by actual US dollars and short-term US government securities held in reserve.
Your starting capital and earnings are denominated in USDC. When you deposit to Hyperliquid, you deposit USDC. When you withdraw earnings, you receive USDC.
Is it safe? USDC is among the most established and transparently audited stablecoins. In March 2023, USDC briefly de-pegged to ~$0.87 when Silicon Valley Bank (where some reserves were held) failed — it recovered within 48 hours once the Fed backstopped depositors. This is the most significant stress event in USDC's history. It is relevant: your starting capital could temporarily be worth less than $1 per USDC in a crisis scenario involving Circle.
Is this the same as FDIC insurance? No. USDC is not a bank deposit. Circle's reserves are held separately from FDIC-insured deposits. If Circle failed and reserves were insufficient, USDC could lose value permanently. This scenario is considered low probability but is not zero.
Paper trading means the strategy is running against real market data, making real trading decisions, but using simulated (fake) money. Every decision the bot makes is logged and visible on the dashboard, but no real funds are at risk.
Why we do this first: We want to demonstrate that the strategy works as described before inviting real money. The paper-trading phase is designed to surface any gaps between the backtest and live behavior — slippage, execution issues, edge cases — before they affect your capital.
When does live trading open? After 4 consecutive weeks of positive performance in paper trading. This is not a number we chose to minimize — it is the minimum track record we consider meaningful enough to justify the additional risk for early participants. We will update the dashboard and this page when that gate is passed.
What you can do right now: Watch the dashboard. Every decision — every entry, every exit, every skipped opportunity, every fee — is visible in real time. This is the most honest thing we can offer you before real money is involved.
This is not tax advice. Consult a tax professional who understands cryptocurrency for your specific situation. What follows is general information about how DeFi yield is typically treated in major jurisdictions.
Almost certainly taxable: In the United States and most other jurisdictions, yield from a DeFi strategy like this is likely taxable income. The IRS has stated that DeFi income is taxable even if you don't receive a form.
No 1099: BasisYield is a non-custodial tool, not a broker. We do not issue tax forms. You are responsible for tracking your own income. On-chain data can be used with crypto tax tools (Koinly, CoinTracker, Tax.biz) to reconstruct your position history.
Transaction volume: This strategy trades frequently. Depending on your jurisdiction, each funding payment and each trade could be a taxable event. The number of taxable events per year could be in the hundreds. This complexity is worth considering before participating.
Capital gains vs income: Whether funding payments are treated as ordinary income or capital gains varies by jurisdiction and the specific legal treatment of perpetual futures. This is an area where professional advice matters.
The practical risk: If you earn $5,000 and don't report it, you may owe taxes plus penalties plus interest on the unreported amount. DeFi does not mean tax-free — regulators in the US, UK, EU, and Australia have all taken positions on this.
This is not legal advice. What follows is factual information about the regulatory status of the product.
Regulatory status: BasisYield is a non-custodial DeFi tool. It is not registered as an investment adviser, broker-dealer, or exchange in any jurisdiction. There is no regulatory ombudsman, no compensation scheme, and no government body that oversees it. This is a fundamental characteristic of decentralized finance.
US residents and Ontario (Canada): Hyperliquid itself restricts access for US residents and Ontario residents. BasisYield operates on Hyperliquid and inherits those restrictions. If you are in these jurisdictions, do not attempt to circumvent these restrictions — doing so may violate applicable securities laws.
Other jurisdictions: DeFi regulation varies significantly by country and is actively evolving. You are responsible for confirming that using this platform complies with local laws before participating. "It's on a blockchain" is not a legal defense in any jurisdiction we are aware of.
If something goes wrong: There is no formal recourse mechanism. If a market event causes losses, if a platform issue occurs, or if a smart-contract exploit happens, there is typically no legal claim against a non-custodial DeFi protocol. The protection model is technical, not legal.
We enumerate these clearly because we believe every investor deserves to know the real risks before committing money. These are not hypotheticals constructed by a legal team — they are genuine scenarios.
Sizing advice: Treat any allocation to this strategy as capital you could afford to lose entirely. If that amount is $0, this is not the right product for your financial situation right now. If that amount is $500, consider starting there. The strategy works at $100; you do not need to overcommit to test it.
If you've only ever used Coinbase, Kraken, Binance, or similar centralized exchanges, the path to Hyperliquid has a few unfamiliar steps. This section walks through every single one. Each step matters — skipping one is how people lose funds to the wrong network or forget a gas fee.
A "self-custody wallet" is software that holds your private key — meaning only you control what happens to your funds. Two good options for beginners:
After installing, the wallet generates a seed phrase — 12 or 24 random words. This is the only backup for your wallet.
Your wallet address will look like: 0x4A3b...7f2E — 42 characters starting with 0x. This is the same address across all Ethereum-compatible networks (Ethereum mainnet, Arbitrum, Polygon, etc.).
USDC is a dollar-pegged stablecoin. You need it on the Arbitrum One network — this is the bridge Hyperliquid uses. The steps are the same on Coinbase, Kraken, Binance, OKX, and most other major exchanges:
Network selection — the most common mistake:
To execute any transaction on Arbitrum — including the Hyperliquid deposit — your wallet needs a tiny amount of ETH on Arbitrum to pay gas fees. USDC alone is not enough; the fee is paid in ETH.
At this point you have: USDC on Arbitrum in MetaMask, a tiny ETH for gas, and your wallet connected to Hyperliquid. The deposit bridges your USDC from Arbitrum onto Hyperliquid's own chain.
Once your USDC is in Hyperliquid, you're on the home stretch. BasisYield needs a trade-only agent key to place orders on your behalf.
Wrong network on the CEX withdrawal. You send USDC on Ethereum mainnet instead of Arbitrum. Your USDC arrives at the right address but costs $15+ to move. Always double-check the network dropdown before confirming.
No ETH for gas. You sent USDC to Arbitrum but no ETH. Every Arbitrum transaction costs a tiny ETH fee — without it, the deposit fails silently. Fix: send $3–5 of ETH to Arbitrum, then retry the deposit.
Typing the address instead of pasting. A 42-character hex address has zero error tolerance. One wrong character = lost funds. Always copy-paste the address from MetaMask/Rabby and verify the first and last 4 characters.
Sending the full amount as the first test. Always do a $20 test run first. Verify it lands in Hyperliquid and you can see it in the interface. Then send the rest. A small fee wasted on a test is far cheaper than losing a large transfer to a process error.
Storing the seed phrase digitally. Screenshots, cloud notes, email drafts, password managers — all of these can be accessed if your device or account is compromised. Paper, stored physically, is the right answer.
Bookmark the real URLs. app.hyperliquid.xyz for Hyperliquid. Phishing sites use near-identical domains. Before approving any wallet transaction, read the URL in your browser bar — not in the page content itself, which can be faked.
If this page answered your questions and you want to understand the strategy in full detail, the next step is the strategy page. It covers the exact trading mechanics, leverage structure, backtest results with honest caveats, and the full risk list.
If you're technically sophisticated and want the protocol architecture, margin math, and execution model: the technical reference has all of that.
Yes, you can — and we want to be direct about this before you go any further. The strategy is designed to be price-neutral (a move in Bitcoin does not directly cause a loss), but three real scenarios can hurt you: (1) Hyperliquid, the exchange where your funds sit, is a 2024 protocol with smart-contract and platform risk — if it suffers a serious exploit or failure, funds on the exchange could be affected; (2) extreme market dislocations can briefly break the hedge, causing mark-to-market losses before the system rebalances; (3) sustained near-zero funding rates erode returns without a capital loss. The first scenario is the most serious and least controllable. This is not a savings account. Only deposit what you can afford to lose entirely.
No. BasisYield cannot withdraw or transfer your funds under any circumstances. Your assets remain in your own Hyperliquid wallet throughout. BasisYield operates using a "trade-only agent key" — think of it as a power of attorney limited strictly to placing and cancelling trades. The exchange protocol itself enforces this restriction; it is not a policy we could override even if we wanted to. Our only technical capability is to open and close positions on your behalf. You can revoke this permission with one click at any time.
Your funds remain in your Hyperliquid wallet and are unaffected by BasisYield's operational status. Because BasisYield has no custody of your assets, a company shutdown means the strategy stops trading — not that your money disappears. Open positions would need to be closed, which you can do directly through Hyperliquid's own interface without involving BasisYield at all. There is no lock-up and no deposit held by us.
The comparison you are making — 24% versus a 4–5% savings account — is the right question to ask, and the honest answer is: the extra return comes with extra risk. The yield source is real: leveraged traders on Hyperliquid pay a fee every 8 hours to hold their positions, and this strategy collects that fee while holding both sides to cancel price risk. The 24% is a backtest figure over 142 days of real data, not a guarantee. Rates fluctuate and can compress toward zero. The Sharpe ratio of 2.80 means the returns have historically been strong relative to their volatility — but the risks specific to a 2024 decentralized exchange (no FDIC, smart-contract risk, no regulatory protection) are genuinely different from a savings account. If those risks are not acceptable to you, a savings account is the right choice.
No. FDIC insurance covers USD deposits at regulated US banks only — it has never covered cryptocurrency or DeFi protocols. If Hyperliquid (the exchange where your funds are held) suffered a catastrophic failure — a smart-contract exploit, insolvency, or regulatory shutdown — funds on the exchange could be partially or fully lost. This is the primary unhedgeable risk of this strategy. There is no government backstop. This is a material difference from a bank savings account, and it is the main reason why the yield is higher: you are being compensated for accepting that risk.
Yes, under normal conditions. Because your funds are in your own Hyperliquid wallet, you can withdraw at any time without asking BasisYield for permission. There is no lock-up period enforced by this platform. Open trading positions would need to be closed first — this takes minutes under normal market conditions. However, during periods of extreme market stress or Hyperliquid platform incidents (the exchange temporarily restricted withdrawals during a liquidity event in March 2025), access can be delayed. You should not deposit funds you may need on short notice.
Almost certainly yes — yield from this strategy is likely taxable income in most jurisdictions. BasisYield does not issue tax forms (no 1099 equivalent), because it is a non-custodial tool, not a broker. You are responsible for tracking and reporting your own gains. In the US, the IRS requires reporting of DeFi income regardless of whether you receive a form. Depending on your situation, funding income may be treated as ordinary income or capital gains. The number of taxable events can multiply quickly if positions change frequently. Consult a tax professional who understands cryptocurrency before participating.
The minimum is $100. The only cost charged by BasisYield is a small builder fee on each executed trade — approximately 2 basis points (0.02%) per trade, taken on-chain and visible with every fill. On a $10,000 position running at typical trade frequency, this amounts to roughly $130 per year. There is no management fee, no performance fee, no subscription, and no withdrawal fee charged by this platform. Standard Hyperliquid network fees also apply and are not controlled by BasisYield.
BasisYield is not regulated by any financial authority — it is a DeFi tool, not a licensed investment adviser or broker. There is no regulatory ombudsman, no compensation scheme, and no government body that oversees it. If something goes wrong due to a market event, a platform issue, or a smart-contract exploit, there is typically no formal recourse. This is a fundamental characteristic of decentralized finance. The protection model here is technical — your funds cannot be taken by BasisYield — not legal. Understand this before depositing.
MetaMask, Rabby, and any WalletConnect-compatible wallet work. If you do not have a wallet, Rabby is a good starting point — it is a browser extension that creates a self-custodied Ethereum-compatible wallet. Setup takes about five minutes. Your wallet address is your account — there is no username or password in the traditional sense. Your wallet is yours alone; losing the seed phrase means losing access permanently, so store it securely offline.
The dashboard is live right now on practice money — every decision, every fee, every skip, explained. No wallet needed to watch.
Open the dashboard →