Excellent read. Could be a layman’s question, but is there a call for a change in operation at all for the limited times when the funding does go negative? The “yield” at this point would appear to come from selling spot bitcoin and longing the future price.
Discussion
no because the differential in funding rates won’t turn that to a profit because you can’t know when it’s going to happen. the whole construction relies on everybody (rightly) assuming it always goes up on a long enough time horizon. you can’t just profit no matter what! 🤣
Yep thanks for the reply. I think I was misunderstanding exactly how perpetual futures work - was more in the mindset of potential arbitrage on fixed expiry futures.