Can’t sleep in the middle of the night, so I scrolled through some on-chain data and found this round’s funding rate is wildly positive. Over on the derivatives side, the long-vs-short battle has once again gone to the extreme. People in the community are arguing about whether there’ll be a reversal or whether the bubble will keep getting squeezed—anyway, I’m not willing to bet on direction. I’ll just watch the show for now.

Speaking of market making: a lot of people think AMMs are a “set-and-forget” profit machine, but in reality, impermanent loss is the “hidden tax.” You drop LP into a pool; when the price moves, you end up getting sliced on one side while topping up on the other. When you calculate in coin terms, it might even be worse than just holding still. In plain words, market making isn’t like farming where you wait for the harvest—it’s more like acting as a free mover/handler for arbitrageurs.

My own low-tech approach: avoid pools with big volatility, or mine those stablecoin pair pools instead. The returns are lower, but at least you can sleep at night. Farming always gets bitten by a couple of pests—what matters is not getting bitten through to the root. With the funding rate this extreme, I guess volatility won’t be small going forward. So I’ll just stay cautiously put for now, and wait until the “retail investors” grow more stable before making a move.