With the floating rate trade (e.g. long BTC / short perpetual), the risk is that all the demand disappears right after you put the trade on and you earn nothing. That’s a timing risk element of this.
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At the very least you want to know the answer to the question "how big of a crash do we need before my futures shorts are at risk of liquidation even if I am only using 1x leverage"
Your 1x leveraged short is the senior tranche but once you've blown through the equity, junior and mezz things start looking a little dicey.
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That’s my line of thinking. I don’t understand what’s unique outside of a lot of it being decentralized. Which I am not sure would be a benefit during a period of chaos. TBF I have not gone down the rabbit hole to the extent
@choffstein has and clearly could be missing something. -
I’m not sure what you’re saying. I’m not making a claim crypto is special in some way. I just think you’re describing operational exchange risk. Every exchange has them. To then say, “this sounds like CDOs” seems disingenuous to me.
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