Funding

Perpetual Contract Pricing Mechanism

Perpetual contract prices are anchored to the spot index price via the funding fee mechanism.

• Long positions pay funding fees to short positions when contracts trade at a premium to the spot price.

• Short positions pay funding fees to long positions when contracts trade at a discount to the spot price. The platform retains none of these fees.

Funding Rates

Funding fees are charged hourly and determined by two components:

1. Interest Rate (IR) Daily rate: 0.03% (Variable).

   Hourly rate:

   $\text{Hourly Interest Rate} = \frac{0.03\%}{24}$

2. Premium Index (P) Calculated at randomized intervals within each minute for each market:

   $\text{Premium Index} = \frac{\max(0,\,B - I) - \max(0,\,I - A)}{I}$

• B: Impact bid price (average execution price to close a long via market sell)

• A: Impact ask price (average execution price to close a short via market buy)

• I: Spot index price

• Impact Notional Value:

  $\text{Impact Notional Value} = \frac{800\,\text{USDT}}{\text{Initial Margin Ratio}}$

The hourly Premium Index is the average of all premium indices calculated within the hour.

Hourly Funding Fee Rate (FR)

IF then:

$$\text{Funding Fee Rate} = \text{Hourly Interest Rate}$$

Otherwise:

$$\text{Funding Fee Rate} = \text{Hourly Interest Rate} + \text{Premium Index}$$

Funding Rate Cap

The absolute value of the funding rate is bounded by:

$$|FR| \leq 0.75\%$$