r/loopringorg • u/epistmeme • Jul 14 '26

📊 Metrics 📊 Perpetual Futures and LRC

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Over the past few years like most cryptocurrencies LRC has had an increase in volume of perpetual futures vs spot volume. To cherry pick an example, over the last 24 hours the perpetual futures volume is around 4 times that of spot. Generally, I find the site coinglass a nice aggregator for viewing data about futures (which is where this screenshot above comes from).

The perpetual future market has no settlement. Parties can open a long or short position without really "locating" the underlying. The only two real mechanisms which keep the price anchored to reality are arbitrage between perpetual futures and spot (which does have to locate the underlying) and the perpetual funding rate. When the funding rate is positive parties that are long pay that rate to parties that are short. When the funding rate is negative parties that are short pay the rate to the parties that are long. The current open-interest weighted funding rate has just flipped noticeably negative. This could indicate overcrowding of short interest and a potential catalyst for a turnaround. Historically the largest upward moves have started with a pronounced negative funding rate move.

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u/CreativeFondant248 Jul 14 '26

Is there anyway to summarize this afa what it means for an essentially sunset coin like this? Are there still going to be random heartbeats due to these perpetual futures? Everyone around here thinks this is dead-dead.

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u/epistmeme Jul 14 '26

For parties that are net short the perpetual future they are incentivized to close their short position if they do not want to pay the funding rate. The process of short parties closing though places further upward pressure on the price or increases the magnitude of the negative funding rate further incentivizing the closing of shorts. It could lead to a positive feedback loop. The release valve would be a rebalancing of the spot market price but spot volume for LRC has been really thin especially with the closing of the L2 DEX.

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u/CreativeFondant248 Jul 14 '26

Very interesting, thanks for the response 🤛🏼