Let me do the math for you, and you'll know how much of a trap this thing is after reading it.#BTC #MYX

Take MYX, which has been quite hot these days, for example. You get charged a funding fee every hour. Yes, you heard that right, every hour, and each time it directly takes away 2%. The key is that this fee is calculated based on the nominal value of your position — for instance, if you open a position of 100U with 10x leverage, your position size is 1000U, so each funding fee is 20U. After five hours, your initial 100U is completely consumed, and this doesn't even account for the opening fees.

The fees are also charged based on the nominal value. If you open a position at market price, it's about 0.4%. With back-and-forth trading, it adds up to 0.8%. If you start with 100U at 10x leverage, just the fees will deduct 8U, meaning you lose 8% before you even start trading. What's worse is the capital utilization rate with high leverage; 100x leverage sounds impressive, but in reality, you can only use 60% of it — it's like borrowing 1 million from a bank, but they only give you 600,000 and charge interest based on 1 million. Isn't that unfair? Want to make money? First, you need to fill that 400,000 'interest pit' before you can even talk about profits.

This is also the reason I've only been trading with 10x and 20x leverage; within 20x, the capital utilization rate can reach 95%, so you can break even with just a small profit. All exchanges have a forced liquidation mechanism; if you lose 60% at 100x leverage, you get liquidated immediately, while for 20x, you have to lose 95% to trigger it. High leverage in a volatile market, if you hold for a longer time, feels like you’re caught in an invisible meat grinder, slowly being ground down.

Many people believe that 'as long as the price comes back, the money will come back,' but that's pure illusion. High-frequency funding fees under leverage create a compounding effect. Take MYX's fee rate, even if the price stays still, the funding fee for a day can eat up 5 times your margin. Even if you're lucky and your returns multiply by 5, after deducting fees, you're still at a loss.

Moreover, all exchanges have an automatic position reduction mechanism. The trades you see making dozens of times their investment no longer have much actual capital in them. Exchanges simply don't allow you to make too much profit; generally, once you exceed 20x leverage, they start automatically reducing your positions. If you open a 100U position at 20x leverage, once it rises to a certain level, they will liquidate part of your position, continuing until it stops at around 30x. The higher the leverage, the quicker you die.

In contrast, Bitcoin and Ethereum have many institutions, companies, and even governments watching over them, keeping the fee rates stable at around 0.01%, which is quite regular. But altcoins are different; you are essentially gambling directly against the project team and the platform, which can cheat. A funding fee of 2% every hour for MYX is over a thousand times the normal rate; this isn't just harvesting crops, it's uprooting them.

There’s also the 0.0005 fee for market closing and opening. If you open a position of 100U at 100x, that’s a 10,000U position, and just one back-and-forth trade will cost you 10U, which is 10% of your total capital. High leverage carries a fatal risk: large forced liquidation orders can tear apart the order book, causing spikes that lead to cascading liquidations. The drop from 42,000 to 30,000 during the 519 event happened this way. Different exchanges have different depths, and the severity of the spikes varies, but they all have mechanisms for early liquidation. If you still have 40% of your capital, they might liquidate you anyway, turning that 40% into profit for the exchange — the worse you lose, the more they gain.

So, I sincerely advise everyone to stay away from altcoin contracts. They look profitable, but they are full of invisible traps; once you're in, you're just a lamb waiting to be slaughtered.$MYX