Recently, I’ve been watching the DOLO token and found a pretty interesting trading opportunity.

The current situation is as follows: spot price is at 0.06 USDT, perpetual contract quote is about 0.05928 USDT, and the spread has widened to around 1.2%. Even more interesting is that the funding rate has turned negative to -0.15%, which means the short side is paying the long side.

**Arbitrage Idea**

The basic logic is straightforward—buy the spot and open a short position on the perpetual contract, locking in the spread and earning funding fees. The specific calculation is like this: the current basis is about 0.72 USDT per 1000 tokens, with a 1-hour funding rate of -0.15%. If this rate can be maintained, the daily yield is quite good. After deducting an estimated 0.2% fee, the gross return per cycle can reach 1.12% (spread of 1.2% + funding fee of 0.12%).

**But there are pitfalls**

However, don’t rush in just yet. DOLO has surged over 50% in the past 24 hours, but trading volume has sharply decreased by 93.5%, which is very risky. What does low liquidity mean? It means your large trades could cause severe slippage, and the spread might suddenly widen, putting pressure on your margin. Small-cap tokens are already highly volatile, and with such low trading volume, a sudden price move could leave no escape route.

**Current stance**

I am currently observing. Unless the spread stabilizes above 1.5% and the order book depth improves significantly, I won’t consider putting real money into it. Even if testing the waters, I’ll only take a very small position. While arbitrage seems stable, execution details determine success or failure. Once risk controls loosen, you could suffer big losses.