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hilss


Total Posts: 70
Joined: Jun 2007
 
Posted: 2022-08-09 15:51
Hi all,

I'm wondering if someone can help me with this question. As of this minute, ETH Spot is trading about 1700 and the Z22 future is trading 45 dollars under (due to "convenience" yield in my opinion).

Short spot, get the long the future? not so fast.

Say you have 10 ETH in your wallet on the blockchain right now. After the merge, you'll have 10 ETH on the forked blockchain, and on main-net. The 10 ETH on the main-net will almost surely have a value > zero. Therefore, it pays to hold the the spot (on the blockchain). Please correct me if I'm wrong, but this is the main reason why the future is trading under.

If I short the spot on (FTX or Binance), and buy the future, what are my risks? I have to borrow the spot ETH from the centralized exchange, but how do I return them to the exchange once I'm done with my borrowing?

Example: I'm long 10 ETH spot that are kept on the exchange. What happens to me pre and post merge? Should I expect to see a drop in ETH by 45 dollars (granted status quo) and expect and airdrop from the exchange?

If I'm short? what do I owe?

As for the PERP contract, should I expect to trade at a 45 dollar discount and some funny business with the funding rates?

Finally, if my ETH is locked in a smart contract on UniSwap (liquidity provider for an ETH/USDC pool), how should I think about my hedge? I'm currently short ETH-PERP.

Sorry if these are dumb questions... but any insight would be extremely appreciated.
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