Odaily News Regarding a new trading mechanism that has emerged in the encryption industry, Andre Cronje posted on the Understand (possibly incorrectly) that this new agreement is very risky. He discussed the components of the mechanism in detail, including the features of perpetual contracts such as the ability to trade without holding trading assets, the “funding rate” that buyers and sellers need to pay, etc., as well as the mechanism of using stETH as margin/collateral in an attempt to Achieve neutral by opening relative positions while reaping the benefits of stETH returns and funding rates. Cronje says he is not a trader and admits that this is not his area of ​​expertise, but he tries to compare these financial instruments to the most basic financial concepts he knows - collateral and debt - and points out that the position will eventually need to be closed or At risk of liquidation. He raised a question, that is, the theory of positions will be closed when the market reverses is a bit like the so-called buy when BTC rises and sell when it falls. It sounds reasonable, but in practice is almost impossible to achieve. So while everything is going well right now (because the market is positive and short funding rates are positive (because everyone is happy to go long)), eventually things will change and funding (rates) become negative and margin/collateral The asset is liquidated and you will have an unbacked asset.