@yvettepowell

When basis between exchanges widens significantly, arbitrage becomes attractive but rarely frictionless. Sustained gaps depend on funding rates, borrowing costs, and the frictions of transferring assets across venues. If the cost of borrowing stablecoins or the delay of moving collateral outweighs the basis, the opportunity evaporates quickly. Analysts should model arbitrage sustainability by comparing gross basis with dynamic costs of execution. Historical persistence of spreads under similar market conditions helps assess the likelihood of profitable capture. Ultimately, only well-capitalized and automated players can consistently exploit wide bases before natural convergence occurs.

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