When the funding rate swings to an extreme, the chat starts shouting “Get in / go short.” I’m the opposite—I check first whether the order book has been hollowed out: thin depth, orders that look like they’re just floating, and slippage so extreme you can kick through it with one step. In moments like that, taking the other side isn’t called courage—it’s basically handing your head to the volatility.

There are only two things you can do: either reduce your position size and slowly place orders to take a bite back to where it belongs (as long as liquidity is still there), or just hide away and wait for the funding rate to cool down on its own. Recently, the L2s have been arguing every day about TPS, fees, and subsidies. To put it plainly: once subsidies roll in, liquidity looks “pretty,” but the moment subsidies stop, it immediately gets exposed…

Even my mom asked me, “If the funding rate is that high, isn’t it a guaranteed profit?” I can only say that if it were truly guaranteed, nobody would be rushing to take the other side.

That’s it for now.