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BitMEX Says Collateral Design Drove 3.93% Funding Gap That Traders May Exploit Repeatedly
BitMEX reported that the design of its collateral system created a 3.93% funding gap in its perpetual swap contracts, a discrepancy that traders could repeatedly exploit.
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What happened
BitMEX reported that the design of its collateral system created a 3.93% funding gap in its perpetual swap contracts, a discrepancy that traders could repeatedly exploit.
Confirmed
Global impact / market context
When a funding gap exists, traders can earn regular profits without taking market risk, which may lower confidence in the fairness of swap pricing and could reduce the amount of money traders are willing to put into these contracts.
Analyst inference
Perpetual swaps are futures contracts that never expire and use a funding rate to keep prices close to the underlying asset; the funding rate is the periodic payment between long and short positions, and collateral design determines how that payment is calculated.
Analyst inference
What to watch
- Any changes to BitMEX’s collateral rules that could make the funding gap larger or smaller, affecting how much profit traders can earn and the demand for the contracts. Analyst inference
- Trader activity that repeatedly takes advantage of the gap, which may cause the swap price to move more sharply compared with the spot market price. Analyst inference
- Regulatory scrutiny of funding mechanisms, as ongoing arbitrage opportunities might lead authorities to examine the fairness of derivative platforms. Analyst inference
Affected assets
- HYPE — Hyperliquid
- BMEX — BitMEX