The most dangerous time for demonic coins is often when they appear to be the most profitable I saw some friends say that demon coins can be used for arbitrage of fund rates, but from my personal understanding, it seems that it is not worthwhile to hedge fund rates for projects with high control of the market. I previously wrote that for a high control market to dominate, it requires the opponent's market. Only with enough opponent's market can the market maker make money. And the funding rate can also affect or even deliberately create it to some extent. For example, the simplest spot price is significantly higher than the perpetual contract price, and after the perpetual discount occurs, it is often easy to form negative capital rates. Conversely, if the perpetual rate is higher than the spot rate in the long term, it is also more likely to result in relatively high positive capital rates. Under normal circumstances, the role of capital rates is to bring perpetual prices closer to spot prices, but for a project with low liquidity and highly concentrated chips, spot prices, contract prices, and even depth itself are more susceptible to capital influence. So when you see a "monster coin" with very exaggerated capital rates, it is very dangerous to engage in arbitrage of capital rates, because it is completely unknown how the Zhuang family will operate. They may hit a wave first because they do not have low enough chips, or they may want to break the market inertia thinking and hit it with just one pull. Only the traders have a clear idea. Moreover, from the perspective of the market maker, the capital fee rate itself may be a trap to attract competitors, such as a very high negative capital fee rate, and investors may go long in order to eat the capital fee rate. The positive capital rate is particularly high, which will attract a large number of people to short perpetual. Once these positions become increasingly concentrated, a large number of opposing positions that market makers need will gradually emerge in the market. In theory, true arbitrage of capital rates should involve both spot and contract trades, offsetting directional risks as much as possible. But because it is a highly controlled currency, it may be difficult to buy sufficient quantities of spot currency when the capital rate is positive, and it may not be possible to borrow currency to short spot currency when the capital rate is negative. Even if hedging is barely established, depth, slippage, and borrowing costs need to be taken into account. Especially during the stage of being manipulated by market makers, theoretical hedging may not necessarily be able to completely hedge. The banker may even make a significant impact in a very short period of time, considering that most of the players are adding leverage, the banker can completely achieve an instant long short double explosion situation. In fact, high funding rates often give investors the illusion that they can receive a stable funding rate every few hours. Although the risk may seem low, this return is essentially taking a small and certain cash flow to bear a huge tail risk that may arise at some unknown time. If you can earn 5% in a day, it may seem like a very good profit, but the banker only needs to create one 30%, 50%, or even more extreme fluctuation, and may take back all the money earned in the previous days. After adding leverage, there is no need for the price to really rise or fall so much. As long as the marked price hits a strong flat line, the transaction is already over. So personally, I think that for assets like Bitcoin: native Ethereum: native with sufficient liquidity and relatively dispersed chips, arbitrage of capital rates can indeed be a relatively mature strategy. But when it comes to a demon coin with obvious high control, I actually feel that the higher the funding rate, the more dangerous it is. @Gate Crypto、 US stocks, Hong Kong stocks, South Korean stocks, gold CFD、 Predicting one-stop trading in the market