Cross Exchange Arbitrage

Funding Rate Arbitrage

WCM applies natural downward pressure on funding rates due to its ability to arbitrage lending and perps markets. When this arbitrage happens, rates are pushed towards each other, which typically makes lending rates higher than other venues and funding rates lower. This process is described in The Capital Sink.

This mechanic opens up a trading opportunity for arbitrage traders. If you open one perp on WCM and another perp on another exchange in the opposite direction, you will make the in difference rates as profit.

Typically, the challenge with funding rate arbitrage is predicting the duration of the rate difference. Because there is no other exchange with a similar risk engine, especially across DEXs, this difference should in theory persist longer on WCM than other exchanges.

HFT

Trades on WCM are expected to be processed at ~10ms intervals. The consequence is that unlike DEXs with slower block times, latency sensitive software gives traders a unique advantage on WCM. We suggest reading Market Making if you are able to provide market making services. WCM offers a CEX-like API.