Funding rates: A beginners guide

How do futures work in tradfi?

Back in normie world, traditional futures contracts are used primarily to trade physical products — think coffee beans, crude oil, orange juice, or even live cattle (yes live cattle futures are a thing). Futures contracts are agreements to buy or sell a product at a future date.

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What about crypto markets?

Here, perpetual futures or perps are somewhat different. They never expire. You can buy as many perpetual futures as you like, you won’t ever take delivery of the underlying cryptocurrency. Therefore, there needs to be some other mechanism to ensure the perpetual future trades as close to the spot price as possible. Here’s where things get interesting…

  • Positive spread: Traders who are long pay funding to traders who are short
  • Negative spread: Traders who are short pay funding to traders who are long

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Juiced

Juiced

Juiced is an interest-rate arbitrage pool using delta neutral positions to earn the best yields, working on Solana.