Many fans who have joined have a misunderstanding about playing with altcoin contracts
$PIPPIN The sharpest scythe right now is not the K-line, but the funding rate that many people have taken lightly
This thing was originally a "balancer," preventing perpetual contract prices from running too far
But now? It has become a precise harvesting tool for high-controlled markets
Many altcoins allow traders to shorten the settlement period to one hour, with rates deducting 2% from you each hour—calculate it, if you do nothing for a day, your principal could be reduced by nearly half
Why is this happening?
Because over 70% of altcoins are highly controlled:
No volume, concentrated chips, stories outweighing substance
The tactics of the market makers are clear:
First, buy in at low prices, release news to pump the price, and attract you with low fees
As more followers join, the contract price is pushed up, and the funding rate suddenly soars to 1% or 2% per hour
At this point, the price begins to consolidate, the market makers neither pump nor dump, relying on high fees to gradually drain long positions' margin hour by hour
When you run out of money, they will dump the price, completing the harvest
Even more outrageous, market makers will also engage in arbitrage between exchanges, creating a false appearance in the exchange with high fees while opening positions in the exchange with stable fees, benefiting from both ends
Many retail investors lose because they have three deadly misunderstandings about fees:
First, thinking that higher fees mean stronger price increases
Wrong, excessively high fees are often a signal for pump and prepare for harvesting
Second, thinking that doing short-term trades can avoid fees
With short settlement periods and large fee fluctuations, your transaction costs plus fees may exceed your profits
Third, thinking that shorting can ensure steady income
In a highly controlled market, fees are usually positive in the long run, but market makers can violently pump the price at any time, wiping out your positions
In short, in altcoin contracts, the funding rate has changed from a risk indicator to the risk itself
In the face of highly controlled and high-fee coins, the best strategy is to stay away
If you must play, you must account for fee costs in every transaction and be clear-headed:
You are not investing, but gambling on a table completely controlled by market makers, against someone who can see your cards
