#I don't know if you have studied the mechanism of the ENA project
This is a currency that may be very extreme. Its economic model is very simple, which is to eat the funding rate through arbitrage. Simply put, perpetual contracts have a mechanism to make the price of the contract consistent with the spot. When the long position is greater than the short position, the long position will give the short position money; conversely, when the short position is greater than the long position, the short position will give the long position money. The ENA project assumes that 100 ETH are purchased and 100 ETH short orders are opened at the same time to hedge. In this way, no matter how the price changes, the total funds invested remain unchanged. As long as the market funding fee is positive, they can make profits continuously. The essence of this project is to scale this model, because it will be relatively troublesome to operate it yourself. However, now you only need to give them the money and they will help you automate it.
Compared with traditional arbitrage model projects, it cites innovations such as STETH and buffer period mechanism, which makes it lower than Luna and other projects. After understanding its economic model, it will be easy to understand this project. When the Ethereum market is good and the funding rate is always positive, the arbitrage mechanism will continuously eat the funding fee. The better the market, the more people go long, and the more the funding rate will be eaten. This is reflected in the price of the currency, that is, it can ignore all pressure levels and soar, spiraling up.
However, once the Ethereum market is not good, the funding rate is very low or even negative, it will not be able to make money through this model. Because at this time, the shorts pay the longs for funding, and the shorts will continue to suck blood from themselves and need to pay funds to the market. This is also the first time that Ena has negative income.
As long as it is not in a bear market, the value of ena will only ignore the upper pressure level and spiral up all the way
