Demand & Supply in Derivatives DeFi

What if I told you there was a way that you could get paid to trade…

A derivatives exchange is a market place.

Like every market place the forces of demand and supply manifest themselves in subtle ways.

The revenue generation mechanism underlying a derivatives platform is the same as that of Ebay, Amazon, iTunes, etc.

They provide the digital infrastructure that facilitate transactions between buyers & sellers and tax every transaction between the two.

Economics presumes that persons are all rational actors, but what mechanism is there to promote market participants to act irrationally and risk their capital to the counter trade of the masses, and technical analysis… beyond sheer speculation?

This, is where the Funding rate comes in, every 8 hours a given percentage of holders' position is exchanged between those that are short and those that are long on a given position. This rate is dependent on the proportion of positions in the market over the last 8 hours.

The funding rate does not vary in accordance with the leverage level selected and it is most attractive to those with high net worth and that have experience with leverage trading.

ByBit is a unique platform in that they allow you to "hedge" your positions by going long and short on a given trading pair.

Allowing you in theory to trade with the masses according to your technical analysis and collect passive income by holding a bigger position in the appropriate position (short or long)

Just sharing what I am doing.

DYOR

Banter On, Banter Strong!
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