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What is Contango?
Contango is a unique decentralized market offering cPerps (Contango perps).
Looping has always been the DeFi-native way of longing or shorting assets on-chain. Since the early days of DeFi, users have been manually borrowing, swapping, lending multiple times on money markets to achieve a leverage exposure to an asset or farm rewards.
These multiple loops were soon automated via flashloans by popular dapps.
DeFi, however, never treated manual or automated loops as future positions, tradable via a professional trading interface.
Here's a 1-min explainer from Defi Dad:
Funding rates (aka APR on Contango) are determined by the difference between the lending and borrowing rates on the money markets. This mechanism offers the least volatile funding rates in the industry, 20x less volatile than market leaders, like Binance and dYdX. These APR values can be positive or negative, offering traders a chance to collect them with a basis trade.