Hey NFA but this is insane
The funding rate for Binance $ETH is plummeting 👀 Currently down to -8.5% APR, but the funding contract quote on the leveraged trading platform @boros_fi is still "positive 6.33%".
The "spread" for short rate arbitrage is as high as ~15% APR (not considering leverage).
To short one YU (representing a contract for 1 ETH), the margin required is only ~0.00217 E (using 2x margin leverage), representing an actual leverage of 461x 🤯.
What does this mean? It means a margin cost of ~$9.5, with a daily settlement income of ~$1.8 (assuming the settlement funding rate remains at -8.5%), or 6900% APR 🔥.
Of course, Binance's negative funding rate may not hold, and market depth may not allow you to short infinitely at +6.3%, so DYOR 🫡.
Not sure how this arbitrage works? The thread below provides past highlights from Boros' educational posts.
NFA 🫠
@pendle_fi @PendleIntern @pendle_grandma
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