When funding rates hit extremes, my first reaction isn't "Should I front-run the other side," but rather ask myself: Am I thinking about making money right now, or am I trying to win back the momentum I lost last time? To put it plainly, once the latter kicks in, any action can easily turn into stubbornly holding on.

Should I take the other side?
It depends on whether you have the capacity to lose and the patience to wait.

Extreme funding rates usually mean the crowd has already crowded one side. Doing the opposite isn't wrong, but you have to accept that it can get even more extreme and last longer, with the price potentially washing you out before turning back. If you have no stop-loss or position limit, don’t pretend to be a hero—dodging volatility is more professional: reduce leverage, cut positions, or simply stay out. Sleep on it and wait for things to normalize.

Recently, the "compound yield" from staking and shared security has been criticized as a copycat scheme. It’s actually the same problem: seeing something tempting and piling on, with all risks concentrated in one logic. When funding rates are extreme, I only do two things: don’t add to positions, don’t prove anything, just stay alive.