Recently, a classic negative example has emerged in the circle—a senior player known for "steady shorting" stumbled on PIPPIN. Over 7 million in principal just evaporated like that, and was brutally harvested by high-frequency funding rates. That gentleman bluntly stated that this is even harsher than direct robbery.

This matter seems to be an isolated incident, but it actually reflects the fatal blind spots that many people have when shorting crypto assets. The logic of shorting is very straightforward – you profit when the price of the coin drops. However, the problem is that for some targets, the funding rate is calculated not daily, but hourly. What does this mean? It means that even if you are right about the direction, you still have to pay a fee every hour, just like in an arm-wrestling match where someone comes by every hour to slap you in the face and take your funds.

The PIPPIN design, which charges on an hourly basis, makes the logic of "shorting" very clear. Based on the current funding rate and rough calculations of positions, even if the price of the coin really crashes next, it will be difficult for those holding such positions to avoid more than 70% of losses, which means they lose money while also paying fees.

Here is a key point to emphasize: the funding rate is a mutual payment mechanism between long and short positions. When the market is overly bearish, shorts have to pay fees to longs. But the key is to understand what the settlement period of the funding rate is at your exchange or asset. Some are settled once a day, some every four hours, and some on an hourly basis. This detail determines your actual cost.

Retail investors often focus only on K-line charts and price trends when shorting, overlooking this "invisible killer." The high-frequency funding rate mechanism may seem like an exchange design, but it can easily be exploited by major players to counter short sellers. This is not alarmist; similar tactics have been played out in the crypto market for years. Before shorting, you must calculate this account clearly; otherwise, even the right direction won't save you.