A certain popular futures currency has been trading sideways around the 0.4 price level for three consecutive days, which naturally brings to mind another classic case—the other coin that was manipulated by funding fee arbitrage.

Here’s what happened: that coin consolidated at the 0.009 retracement level for a full 10 days to absorb funding costs, then suddenly surged straight up to 0.027, tripling in value. Interestingly, after the drop, it again traded sideways at the 0.009 key level for a month, during which there were continuous funding fee traders betting against it.

The data is shocking. Assuming an average funding fee of 0.1% per hour, that’s a loss of 2.4% per day, accumulating to 24% over ten days. What’s truly terrifying is the effect of compound interest—if the short sellers hold their positions for 21 days in such sideways trading, all their gains are wiped out by funding fees. This mechanism is like a bottomless pit; once you fall in, it’s very hard to escape.

Regarding this “demon coin,” various warnings have been issued, but the reality is brutal. A single trending tweet has nearly 700,000 views, meaning at least 600,000 retail investors have heard of this coin’s name. If just 10% of them actually participate, the whales will have enough chips to endlessly harvest. Retail investors are initially afraid to chase the rally for fear of being caught, but after half a month of watching, they can’t resist jumping in, ultimately becoming the last to buy in—the final straw—leaving both bulls and bears stuck in an unsolvable situation.

The power of funding fees in futures contracts is indeed frightening, but what’s even more terrifying is human nature’s repeated swings between greed and fear.