Shearing sheep fails? An article reveals the ins and outs of the Bitget VOXEL contract storm
In just a few hours, the entire event was filled with controversy and countless questions, from the surge in trading volume to the spike in funding rates, followed by risk control restrictions and trade rollbacks.Author: Fairy, ChainCatcher
Editor: TB, ChainCatcher
Screenshots of profits and videos of contract operation records are flooding social media platforms, quickly stirring up a wave of emotions throughout the community.
On Bitget, the VOXEL perpetual contract suddenly sparked a thrilling "arbitrage game." This seemingly "free money" feast ultimately became the focus of a storm. Within just a few hours, the event was filled with controversy and countless questions, from a surge in trading volume to skyrocketing funding rates, followed by risk control restrictions and trade rollbacks.
This article will outline the course of events, analyze the "arbitrage" path and Bitget's funding rate mechanism, and help clarify the layers of confusion.
A "Free Money" Frenzy Ignites a Storm Across the Internet
On the afternoon of April 20, the VOXEL/USDT perpetual contract on the Bitget trading platform suddenly "soared," with prices fluctuating violently between $0.125 and $0.148. Trading volume surged, with the VOXEL contract trading volume exceeding $12.7 billion that day, surpassing mainstream cryptocurrencies on the platform.
During this period, Bitget's contract positions and trading volume far exceeded those of other exchanges.
The community began to suspect that Bitget's market-making bot might have a flaw, continuously mismatching orders incorrectly, leading to abnormal liquidity.
Meanwhile, several KOLs and community users posted, pointing out that this contract might have a "risk-free arbitrage" window, with some achieving huge profits through high-frequency operations in a short time. It was reported that some users repeatedly traded with a principal of 100 USDT, earning over 100,000 USDT; others made 7,000 USDT from 200 USDT, with a return rate as high as 35 times. Various profit screenshots and operation videos quickly spread on social media.
However, many users soon found their accounts frozen, and funds could not be withdrawn. Bitget subsequently responded that some accounts were temporarily restricted due to risk control triggered by trading behavior. In the evening, Bitget's Chinese head, Xie Jiayin, stated that some accounts had completed trade rollbacks and restored trading, deposit, and withdrawal functions. If liquidation occurred due to risk control restrictions, the platform would take full responsibility.
Thus, this storm surrounding arbitrage, mechanisms, and the platform's handling methods continued to ferment within the community.
Dissecting the "Arbitrage" Path of "Raking in VOXEL"
Aside from community disputes, the arbitrage path of "turning 100 U into over 100,000 U" is equally eye-catching. According to community user @suwanyu7777, the entire operational logic is not complicated; the key lies in exploiting the violent fluctuations in price within a specific range, combined with the platform's market-making system's anomalies to realize profit harvesting.
- Locking in the Anomalous Fluctuation Range
First, some users observed that the VOXEL/USDT contract price fluctuated rapidly within a fixed range (e.g., $0.135-$0.148), while trading volume surged significantly. This anomaly might stem from a malfunction in the market-making bot's algorithm, causing it to automatically accept orders within a specific price range, thus opening a "risk-free arbitrage" window.
- Setting Trading Strategies
Arbitrageurs typically use high leverage combined with a simple strategy path:
- Build long positions at low levels: for example, opening a long position at $0.135;
- Set take-profit at high levels: setting a take-profit point at $0.148;
- Quickly lock in profits: due to the market-making system's errors continuously matching orders, take-profit orders could almost be executed instantly.
- High-Frequency Compounding Operations
Due to frequent fluctuations in price within a specific range and the bot's continuous "cooperation," users could repeatedly perform long-opening and take-profit operations, locking in small profits each time. Through high-frequency trading, profits accumulate rapidly.
The "Amplifier" of Funding Rates
Behind this arbitrage feast, the funding rates of the VOXEL contract also exhibited extreme and abnormal fluctuations. At one point, it soared to a "ceiling" level of -2%, far exceeding the common range of 0.01% to 0.1%. After the incident, discussions about Bitget's funding rates arose in the community. To clarify this mechanism, we consulted the relevant explanations on Bitget's official website.
The funding rate consists of two parts: "interest rate (I)" and "premium index (P)," with a ±0.05% buffer zone set, along with upper and lower limits for the funding rate to constrain extreme values.
The core formula is:
Funding Rate (F) = Clamp([Average Premium Index (P) + Clamp (Interest Rate (I) - Average Premium Index (P), -0.05%, 0.05%)], Funding Rate Lower Limit, Funding Rate Upper Limit)
Here, the premium index measures the degree of deviation of the market's buy and sell orders from the index price:
Premium Index (P) = [Max(0, Impact Buy Price - Index Price) - Max(0, Index Price - Impact Sell Price)]/Index Price
The interest rate is dynamically set based on time intervals:
Interest Rate (I) = (0.03%)/Funding Interval, Funding Interval = 24/Funding Interval Time
The core of Bitget's mechanism lies in the "weighted average premium" principle, calculating the interest rate and the average premium index per minute, then calculating its weighted average value every N hours. The closer to the settlement time, the greater the coefficient of the premium index. Ultimately, the funding fees paid or received by users equal the position value × funding rate.
However, under extreme emotions and high leverage stacking, this mechanism, originally designed for "price anchoring," can also become an amplifier of market sentiment. When the funding rate drops to -2%, the profit space for arbitrageurs is significantly enlarged, attracting more speculators to rush in, forming a spiral acceleration.
The Path of Trust in Crisis
As the event has continued to develop, a large number of "online public relations consultants" have emerged on platform X, offering Bitget advice on a "crisis management guide": some suggest that the platform roll back funds to compensate affected users and establish a BGB mining pool to distribute remaining funds to BGB holders, demonstrating the platform's responsibility; others recommend honestly explaining the market-making bot's operational errors and compensating affected users, while resolving issues with accounts that made abnormal profits through negotiations between market makers and users.
Additionally, many voices have proposed constructive ideas around "enhancing user stickiness," such as retaining accounts that profit normally within a certain fluctuation range, and considering partial profit + BGB installment unlocking for settling frequent high-frequency arbitrage behaviors; at the same time, it is suggested to establish a "platform optimization suggestion fund" to reward users who provide feedback on abnormal mechanisms or vulnerability issues, thereby guiding the community to co-build the ecosystem.
Public sentiment is still fermenting, but the storm also reflects users' higher expectations of the platform. In a high-leverage, fast-paced market, even a tiny crack can trigger the next storm. The platform can only stabilize its course between risk and trust by continuously learning and proactively evolving.
