Funding

Overview

Funding is the mechanism that converges perpetual contract prices toward the underlying index price.

• Positive rate: longs pay shorts
• Negative rate: shorts pay longs

Funding is a peer-to-peer transfer between counterparties, not an exchange fee.

Funding Rate

At each settlement interval:

$$\text{Funding Rate} = \text{clamp}\left(\frac{\text{Average Premium Index}}{8},\ -1\%,\ +1\%\right)$$

The clamp bounds the per-interval funding rate to ±1% (hourly cap). The premium index is averaged over a 1-hour rolling window of 60 one-minute samples. The divisor 8 is the standard 8h-to-1h scaling convention, not the window size.

Premium Index

Computed from impact prices:

$$\text{Premium Index} = \frac{\max(0, \text{Impact Bid} - \text{Index}) - \max(0, \text{Index} - \text{Impact Ask})}{\text{Index}}$$

Impact prices are simulated execution prices for a predefined impact notional, not top-of-book quotes. This filters out thin-quote noise and measures executable dislocation at meaningful depth.

If book depth is insufficient to compute impact prices, index-based fallbacks are applied per market rules.

Funding Payment

Per settlement event:

$$\text{Funding Payment} = \text{Position Size} \times \text{Mark Price} \times \text{Funding Rate}$$

Sign convention:

• Positive payment: account pays
• Negative payment: account receives

Worked Example

Scenario

Long position of 0.5 BTC-PERP at funding settlement.

Inputs

Calculation

$$\text{Funding Payment} = 0.5 \times 60{,}000 \times 0.0001 = 3$$

Settlement Outcome

Funding payment = +3 USDC, so the long account pays 3 USDC for this funding event.

Operational Considerations

• Funding accrual and settlement timing are defined per market.
• Use the mode field to determine exactly which operations are allowed (see Market Lifecycle). The enabled and post_only boolean fields are legacy; prefer mode for all operation checks.

Funding Telemetry for Integrators

Use market metadata and WebSocket streams to pre-compute carry impact:

• Funding interval configuration and next settlement timing
• Predicted upcoming funding direction and magnitude
• Real-time funding updates from market-data channels

For carry-sensitive strategies, monitor predicted funding jointly with mark-vs-index divergence and open-interest saturation.

For exact field names and stream payloads, see:

• List all available markets
• WebSocket channels

Related

• Mark Price
• Fees
• Margin System