What Is the Relationship between the ‘Implied Interest Rate’ and the Basis in Crypto Futures?

The theoretical basis of a futures contract is directly related to the implied interest rate, often referred to as the cost of carry. In a perfect market, the basis should equal the cost of financing the spot asset until expiration (the risk-free rate).

If the actual basis deviates from the implied interest rate, it suggests an arbitrage opportunity. The implied rate is the interest rate derived from the current spot and futures prices using the cost of carry formula.