The Role of Funding Rate
The key role of the funding rate is to narrow the price difference between the Perpetual Futures market and the corresponding spot market (price convergence).
Cryptocurrency trading platforms have created a mechanism to ensure that the Futures price aligns with the index price, and this mechanism is called the funding rate.
What is the Funding Rate?
The funding rate refers to the periodic fee paid to long or short traders based on the price difference between the Perpetual Futures market and the spot market. When the market trend is bullish, the funding rate is positive, and long traders pay the funding rate to short traders. Conversely, when the market is bearish, the funding rate is negative, and short traders pay the fee to long traders.
The funding fee is charged between long and short parties, and the platform does not collect any funding fees. The actual funding fee that users can receive also depends on the total amount deducted from the opposing party's account by the system.
On the Aibit Futures trading platform, the funding fee is calculated every 8 hours at 00:00, 08:00, and 16:00 (UTC time). Only when a trader has a position in any direction at the time of settlement, will they be charged or paid the corresponding funding fee. If a trader has no position at that time, no funding fee will be charged or paid.
Note: The actual settlement time for funding fees has a 15-second deviation. For example, if User A opens a position at 08:00:05(UTC), User A will still be subject to the funding rate. Please pay attention to your opening time.
Funding Rate Formula: Funding Rate = Clamp(MA(((Best Bid Price + Best Ask Price) / 2 - Spot Index Price) / Spot Index Price - Interest), a, b)
*Interest is set to 0 by default.
*The funding rate is calculated every minute, and the funding fee is collected based on the funding rate calculated at 07:59, 15:59, and 23:59 during the funding fee settlement time (08:00/16:00/24:00)
Funding Fee = Snapshot Position Quantity * Mark Price * Funding Rate
Note: The above data and indicator may be adjusted in real-time based on market conditions, and such adjustments will not be separately notified.