Securitize Partners with QCP on Innovative Trading Strategy

Securitize Credit is collaborating with digital asset trading firm QCP to integrate the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) into Securitize’s yield-generating strategies.

Partnership Details

The partnership entails Securitize Credit engaging in a basis trade with QCP, utilizing the tokenized BUIDL fund as collateral. This is noted as the first derivatives trade backed by BlackRock’s on-chain fund as collateral, according to a press release received on Thursday.

Basis Trade Returns

This bitcoin-based basis trade—often termed a cash-and-carry trade—reportedly yields Securitize 20.71% returns per annum. Cash-and-carry trades are increasingly prevalent in the crypto landscape, adopted by protocols such as Ethena and SuperState, alongside traders seeking arbitrage opportunities between spot and futures prices of crypto assets.

Typical Basis Trade Mechanism

A standard basis trade in crypto consists of purchasing an asset in the spot market while concurrently shorting the same asset in the futures market. This strategy allows investors to benefit from the difference between spot and futures prices as the “basis” narrows, reflecting that prices generally converge upon futures expiration.

Previous Trading Strategies

As cited in the press release, Securitize has collateralized its six-month bitcoin-based basis trade prior utilizing stablecoins, garnering about 11.26% annually.

By replacing stablecoins with BUIDL, Securitize maintains that 11.26% annually (the profit from buying spot BTC and shorting bitcoin futures) while additionally earning 4.25% annualized yield inherent to the BUIDL fund.

Furthermore, the firm managed to sell $60,000 worth of bitcoin puts against its stance, benefiting from an additional 5.2% due to BUIDL’s reputable, low-risk profile in the market.

> “Trades collateralized with stablecoins or dollars yield less than those using BUIDL. This is attributable to investors retaining the yield provided by BUIDL, facilitating compounded returns,” explained the firm.

About BUIDL

BUIDL was launched in March 2024 via Securitize Markets and now stands as the largest tokenized fund with a market cap exceeding $650 billion. The BUIDL token is backed by short-term U.S. government debt and is pegged to the dollar.

Institutions and protocols leverage the token for yields on their reserves, collateralizing trades, and developing derivative products. Initially launched on Ethereum, the BUIDL token has expanded to Aptos, Arbitrum, Avalanche, Optimism’s OP Mainnet, and Polygon.

The Rise of Tokenization

Tokenization continues to be one of the swiftest-growing trends within the crypto subsector. The underlying premise is that transferring “real-world assets”—such as government bonds or private credit funds—on-chain can engender expedited settlements and enhanced transparency.

About QCP

Established in 2017 and based in Singapore, QCP stands as a leading wealth partner in digital asset strategies. Last year, it formed a partnership with Hashnote, enabling clients to utilize Hashnote’s USYC as collateral for QCP investment products. Reports indicate QCP is exploring the use of BUIDL in its interest rate swap products.

Financial Backing

BlackRock serves as a financial backer of Securitize.