The CAKEUSDT perpetual contract launched on 24 March 2022. You can now use CAKEUSDT to hedge against risk and help you offset potential losses.
Favoured Funding Rate for Hedgers
Funding rate for CAKEUSDT is 0% now, as compared to an exchange like FTX with a current hourly funding rate of -0.007% and a projected yearly funding rate of around -61%.
If you own CAKE, you can hedge against risk by shorting futures even if the price of CAKE fluctuates over time. With 0% funding rates, you can save on a whole lot of funding fees.
How to arbitrage and earn 60% risk free APY
You could also stake CAKE with 60% APY on PancakeSwap and hedge with zero cost, which is a perfect arbitrage.
Step by step guide
1. Refer to this tutorial to learn how to stake CAKE on PancakeSwap.
You could check the funding rate under Funding / Countdown, as you could see it is much lower compared to FTX.
3. Connect your wallet by clicking the Connect Wallet button (top right corner). Deposit USDT in your trading account to start trading.
To deposit funds, click on the blue + sign button in the right panel. A pop-up window will appear. Select the coin type and amount you would like to deposit in. Click Confirm.
Useful reading: How to Deposit and Withdraw Funds?
4. On the right panel, you can adjust the leverage multiplier and choose a specific order type. Click the Sell/Short button once you are done. Your order will be recorded in the order book.
Useful reading: Leverage and Margin for USDⓈ-M Perpetual Futures Contracts
5. You can view your unrealized PnL (uPnL), estimated liquidation price, margin ratio, and other information about your current positions at the bottom of the candlestick chart.
You are all set to enjoy your risk free return! Any profit or loss caused by CAKE price fluctuations will be offset by your PnL on the futures side.
6. You can close your positions when you want to exit the trade.
Use CAKE for discounts
Users who pay in CAKE will enjoy a 5% discount on trading fees (i.e. trading fees for CAKE holders are 0.019% for makers & 0.0665% for takers).