What Is a ‘Futures Contract’ and How Can It Be Used in Stablecoin Arbitrage?
A futures contract is an agreement to buy or sell an asset at a predetermined price on a specified future date. In stablecoin arbitrage, a futures contract on the collateral asset (e.g.
BTC) can be used to lock in the price of the collateral received from the burn, reducing price risk between the arbitrage steps. This allows for a more certain profit calculation.