These days, I’ve noticed the funding rates are starting to spike to pretty extreme levels again, half the group is shouting "the counterparty is just giving away money," while the other half advises "don’t fight the trend head-on." I personally am a bit more cautious: when the numbers get absurd, I’ll first reduce my position and not rush to prove I’m smart... Making money from the counterparty is just about returning to normal, but enduring the volatility is really tough, especially when the market suddenly freaks out, I just go offline rationality-wise.

Interestingly, recently, the "compound" yield from pledging/shared security has also been criticized as a scam, and I can empathize with that doubt: it looks like an extra layer of profit, but it also adds an extra layer of uncertainty. When the rates are extreme, it’s the same illusion — thinking you’re getting something for free, but actually risk is being bundled in.

Anyway, my current approach is mostly: avoid if I can, and if I do trade, I only use small positions to test the waters, admit mistakes if I make them. It’s a bit depressing, but at least I’m still in the game, so that’s how I’ll go for now.