Someone asked me whether I should take the other side when the funding rate gets especially extreme. I actually prefer to “hide.” To put it plainly, the more exaggerated the rate is, the more it feels like emotions are being tugged around. Even if you’re on the right side of the direction, you may still get slapped in a chain reaction by volatility and liquidations. I’m the kind of slow-cooker; I’d rather make a little less—turn off leverage, reduce my position size, or simply go and take some more solid on-chain yields.

People have recently been comparing RWA, U.S. Treasury yields, and on-chain yield products, don’t they? My feeling is: don’t get fooled by something that “looks pretty much the same.” A lot of the yield on-chain is actually a risk premium. When an extreme market move comes, the returns don’t change, but the risk doubles straight away. If you really want to take the other side, that’s fine—but I only use a small amount of money to recover the sentiment tax. I don’t expect to get rich from it; being able to sleep at night matters more.