Last night, I kept an eye on the perpetual funding rates, and it was so exaggerated it was almost ridiculous.

I used to be quite stubborn, thinking that just looking at on-chain data was enough, and if the rates were extreme, it meant everyone was leaning to one side, so I’d open a counter position and wait for a reversion...
But these two times woke me up: during extreme conditions, the market doesn’t necessarily revert first; instead, a more intense wave of volatility can wash you out first.

Now I’m more like: first check if there’s cooperation on-chain (large transactions entering exchanges, sudden volume on cross-chain bridges, net inflow/outflow of stablecoins on mainstream Layer 2s), then decide whether to take the opposite side;
if the on-chain signals don’t give a clear “assist,” I’d rather stay out, even if it means earning less.
The recent criticism of the “compound yield” from staking/sharing security setups, which some call a copycat scheme, also reminds me of one thing: seemingly stable returns might have underlying risks that resonate together, and when the market trembles, everything gets exposed.
Anyway, I’ll start with small positions and admit mistakes if I’m wrong—no need to fight against extreme rates head-on.