Funding Rate Arbitrage: Deep Dive into Designing and Running the Strategy in Hummingbot

Hummingbot CTO Federico introduces Funding Rate Arbitrage, a new Hummingbot strategy that exploits the differential between funding rates on perpetual futures exchanges like Hyperliquid and Binance Futures.
00:00 How Funding Rate Arbitrage Works
04:00 Comparing Funding Rates Across Venues
05:25 Designing the Funding Rate Strategy
12:15 Defining Strategy Parameters in Hummingbot
15:25 Running the Funding Rate Arbitrage Strategy
22:55 Receiving Funding Payments
Check out the strategy code in Github: github.com/hummingbot/humming...
Take Hummingbot Botcamp to learn how to develop strategies like this:
www.botcamp.xyz/

[@dgoullet1]

Very interesting, thanks

[@ahmetsaidtekkurt7832]

very helpful video. this is my 4th time watching this. I have a question about funding fee rates. on binance either you pay/receive full funding rate or none depending on if you hold the position at funding interval or not. Does it same for perpetual DEX's ? One of my friend said DEX's pay according to duration you hold that position. Also some exchanges pay hourly some 8hourly. How can i normalize these different funding rates and compare them to calculate profitability ? Seems like I have to assume an average duration for a position to asses it as profitable

[@Alex-jv5ci]

Thanks for the strategy! I have a question, how to connect the first Binance connector from one subaccount in one instance of the bot, and the second Binance connector from another subaccount with different API keys?

[@fengtality]

currently, that's not possible out of the box with Hummingbot, but you can submit an improvement proposal to add the ability to support multiple exchange accounts in one instance.

[@manueldecara1119]

Awesome video. Thank you! Just a quick q: How does the trade profitability know what kind of fees you get? Is that set anywhere in the config.yml or is the system just fee aware by checking your 'VIP level' on the exchange via API. Thanks!

[@fengtality]

depends on how each connector implements the get_fee method, but for the larger exchanges I believe this method fetches your actual fee rate via API

[@cardosofede]

Yes is taking the fees from the exchange so it will take your fee tier into account

[@cryptophrenik6500]

Great stuff tho a bit difficult to make out the audio at certain points given low volume.

[@ahmetsaidtekkurt7832]

i did not get the trade pnl and min_profitability checks

[@fengtality]

you are entering into long and short positions to capture the arbitrage, so the entry/exit prices matter

[@angelmarine744]

Hi, thank you for an amazing feature! Btw, I have one question in the implementation code in the github. I find that in the code, you use PositionExecutor instead of ArbitrageExecutor, is there a reason for this? What could be the difference between using PositionExecutor and using ArbitrageExecutor?

[@user-vz7qh9jm1d]

If only Binance accounts can run this test

[@cardosofede]

you can run it on any perp exchange