There’s a 500% penalty on Hyperliquid oil short-selling
Crypto exchange Hyperliquid is paying traders 500% a year to hold long oil derivatives. Payouts are hourly as an additional reward atop the price appreciation of oil itself which has regained $100 per barrel. Of course, if it sounds too good to be true, it probably is. There are no free lunches on Wall Street. First of all, Hyperliquid offers extreme leverage — up to 20x on Brent oil, for example — so unremarkable, intraday price fluctuations can easily wipe out a portfolio. Moreover, even unlevered trades on Hyperliquid inherit innumerable financial risks from bugs, hackers, market manipulators, vulnerable technologies, and offshore counterparties. Still, Brent and WTI oil perpetuals on the crypto exchange printed deeply negative hourly funding rates today, meaning that the short side of the trade is overcrowded and must pay fees to borrow margin exposure from less popular longs. Traders on the venue are so one-sided that shorts must pay 500% annualized fee...