This article provides a comprehensive explanation of Storm Trade, the first decentralized derivative exchange in the TON ecosystem, which has emerged due to the higher funding rates associated with low-risk arbitrage strategies.
Table of Contents:
1. Storm’s funding rates are several times higher than traditional CEX.
2. Storm trades earn airdrop points.
3. What are the risks of Storm Trade?
Storm Trade, the first decentralized derivative exchange in the TON ecosystem, aims to allow users to leverage trade cryptocurrencies, stocks, forex, and commodities on the web and Telegram. However, currently, it only offers around ten trading pairs.
In simple terms, Storm Trade is a decentralized perpetual contract exchange in the TON ecosystem, similar to dydx. Although it currently has a limited number of token pairs, the funding rates are generally much higher than those of traditional exchanges, creating arbitrage opportunities.
Taking the BTC/USD contract as an example:
The funding rate is +0.01695% per hour (paid by longs to shorts).
The holding commission is 0.0034% per hour (platform-specific fees).
Bybit’s current funding rate is +0.0004% every 8 hours (paid by longs to shorts).
Therefore, by shorting on Storm and longing on centralized exchanges (or buying spot without leverage to avoid funding costs), the daily funding rate can be obtained as follows: (0.01695% – 0.0034%) * 24 – 0.0004% * 3 = 0.3228%.
Converted, this translates to an annualized return of approximately 117% APY (actual returns may be lower due to fees on both platforms).
Additionally, Storm Trade currently offers an attractive airdrop point program. Users can accumulate points by trading or providing liquidity, which can be redeemed for token airdrops (scheduled for Q2 this year). For detailed information on point accumulation, please refer to the following link: [link]
What are the risks?
The biggest risk is the possibility of the platform running away or the oracle being compromised, leading to abnormal token prices. Please be aware of your risk tolerance.
Furthermore, there may be slight discrepancies in prices between Storm and other CEX. However, based on my testing, they generally oscillate in sync. There may be minor friction when closing positions, so please conduct your own research (DYOR).
Note from the author: The project is still in its early stages, so please ensure proper risk management.
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