Over the past couple of days, I’ve seen a whole bunch of “yield on yield” from re-pledging and “shared security.” To be blunt, what I’m most afraid of isn’t the risk stacking on top of itself—it’s the illusion that stacks on top of it… The curves that look so beautiful in backtests are, in many cases, just the same tail risk wrapped in a different shell and kept getting amplified. Especially when you realize the underlying security is actually propped up by the same batch of collateral—if something goes wrong in one part, it can trigger a chain reaction, and the profits can get liquidated or confiscated before you even get the chance to sit on them and enjoy them.

Also, the funding rates are swinging to extremes again, and in the group people are arguing whether to reverse or keep squeezing the bubble. Personally, I’m more inclined to treat moments like this as a “stress-test dossier”: once the high-rate plus high-leverage sentiment hits, the first thing that tends to get exposed is usually those structures that are stacked to the max. Anyway, I’ll just calculate my positions as if they could go to zero at any moment—if I can sleep at night, that’s enough.