How to arbitrage?

Per DPMM mechanism, funding fee is paid from the majority side to the minority side. Therefore, a very simple arbitrage strategy is to take the minority side of the pool. This involves the following steps:
  1. 1.
    Read the current funding rate of the pool. when it's positive(negative), enter a short(long) position.
  2. 2.
    Accordingly, hedge your short/long position outside (e.g. hold a spot position or take a position on a CeFi exchange as you wish).
  3. 3.
    Sit back and enjoy collecting the funding earning (i.e. negative funding fee) as long as the sign of the funding rate does not flip.
You can check out our demo of arbitrage for your reference. Please note that the code is for demo purpose only. So you will use it at your own risk. We are not responsible for any loss caused by using this code.

Is trading on Deri Protocol risk-free?

Trading Margins & Contracts on Deri Protocol includes but is not limited to - a high level of risk, and may not be suitable for all kinds of investors. The enormous degree of leverage can work in favor of you as well as against you. Before making the decision to invest using Deri Protocol, you should carefully consider your level of experience, investment objectives and risk appetite. There is a possibility that you may lose part of your investment or all of your initial investment. You should be aware of all the risks associated with trading contracts and margin. Deri Protocol will not be responsible for any losses, damages or claims arising from events falling within the scope of the events mentioned above. We urgently advise you not to invest money that you cannot afford to lose and we also recommend you to seek advice from an independent financial adviser, If you have any questions or doubts!
Last modified 17d ago