Funding Costs

We anchor the price of perpetual contracts to the spot index price through a funding fee mechanism. Long positions pay short positions when the future is trading at a premium; short positions pay long positions when the future is trading below. The platform does not receive any of the fees.

The funding fee is charged every hour, and calculated as follows:

Funding Fee Rate Calculation

The funding fee rate is comprised of two components: the interest rate and the premium index.

The interest rate is currently set to 0.03% per day.

The premium index is calculated for each market, per minute (at random points in that minute) using the following formula:

Where:

• B is the impact bid price, or the average execution price to close out a long position of impact notional value through a market sell

• A is the impact ask price, or the average execution price to close out a short position of impact notional value through a market buy

• I is the spot index price

• Impact Notional Value is set to 800 USDT / Initial Margin Ratio of the Market

The total premium index for an hour is then the average of all premium indices calculated for that hour.

In other words, the funding fee rate will equal the hourly interest rate if the premium index is within 0.05% of the hourly interest rate.

Funding Fee Rate Cap

The absolute value of the Funding Fee Rate is capped at 0.75%.