The past two days I’ve seen funding rates spike to completely absurd levels again. In the group, a bunch of people have been asking whether to “do the counterparty trades.” To put it simply: extreme funding rates mean extreme emotions—but that doesn’t mean it’s “free money.” Especially if you go in with leverage, and then the market suddenly jerks with a needle-like move, you might not even get the funding fee before you’re forced out…

My own approach is: if I can use spot or low leverage to do a small hedge, I’ll do a bit—kind of like trying it as “rent collection.” But if volatility is clearly going to be amplified (for example, when some news heats up and both the upside and downside start looking crazy), I’d rather dodge it; earning less is fine. Lately, comparing RWA and the yields on US Treasuries with on-chain yield products has also been pretty hot, but I’m actually more wary: you think you’re getting interest, but what you’re really taking is volatility as if it were interest. Anyway, I’ll cut my position first and wait until the emotions cool down.