Must-see! Common questions about the U-standard lossless arbitrage model
Recently, there has been an increase in the number of new entrants, and the classic U-standard lossless arbitrage model has attracted much attention. The following are the common questions and answers:
Arbitrage model principle
The U-standard can be converted to the current currency standard to short to ensure that the U-standard is lossless and obtain stable funding rate interest. For example, when the currency price is 70,000, use 70,000 to buy 1 currency, and then transfer it to the currency standard contract to short 1 currency at 1x. Regardless of whether the currency price rises or falls, the number of currencies has profit or loss, but the conversion to the U-standard principal remains unchanged, which is a risk-free arbitrage strategy. In the future, we will specifically explain how to conduct spot hedging arbitrage with the U-standard contract.
Frequently Asked Questions
- Question 1: If the market explodes, the position will be liquidated: Answer: The currency standard 1x short will never be liquidated.
- Question 2: If the rate becomes negative, will it be a loss: Answer: Yes, but the negative rate requires a bearish environment and an increase in short positions. When the general rate returns to 0.01%, you can close the position and sell the spot.
- Question 3: In the bull market, you can make a profit of about 10% a year? Can you sit still while watching the coin price reach new highs every month: Answer: This is a risk-free U-standard principal protection arbitrage strategy. Unlike the risk of speculating in coins, the profit is 10% per month.
- Question 4: The actual daily turnover needs to be divided by 2 because your capital utilization rate is only 50%: Answer: No need to divide by 2, because all funds are used to buy coins, there is no situation where the U-standard spot contract is half and half.
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