The Funding Rate is a periodic payment between Long Position and Short Position holders on a Perpetual Contract. It pushes the contract price back toward the Index Price, so the two do not drift apart over time.

Why the Funding Rate Exists

A Perpetual Contract has no expiry date and no delivery date. Its price is set by market supply and demand, so it can move away from the Index Price over time. The Funding Rate is the mechanism that brings it back.

• - When the contract price is above the Index Price (too many Long Positions), the Funding Rate is positive. Long Position holders pay Short Position holders, which discourages new long demand.
• - When the contract price is below the Index Price (too many Short Positions), the Funding Rate is negative. Short Position holders pay Long Position holders, which discourages new short demand.

Whether the rate is positive or negative is decided by the market. It is not fixed in favour of either side.

How the Funding Rate Is Calculated

The platform calculates the Funding Rate in three steps. The formulas below are based on the platform’s internal definitions.

1. 1. Calculate the Instantaneous Premium Index. The platform samples this value every 5 seconds:

• - Premium Index = [max(0, Impact Bid Price − Index Price) − max(0, Index Price − Impact Ask Price)] / Index Price
• - The Impact Bid Price (BidWeightedPrice) and Impact Ask Price (AskWeightedPrice) are the volume-weighted average prices at which an order for the “Impact Margin Amount” would be fully executed in the order book. The Impact Margin Amount (DepthAmount) is calculated as:
• - Impact Margin Amount = Maximum Leverage × 200 USD
• - USD means US dollars.
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2. 2. Calculate the Average Premium Index. Once per minute, the platform takes a linearly weighted average of the Premium Index samples over the current settlement period. Later samples count more than earlier ones:

• - AvgPremiumIndex = Σ( PremiumIndex_i × i / Σ(i) ), where i = 1, 2, …, N and N is the total number of samples.
• - The default settlement period is 8 hours. If the settlement interval is adjusted (see below), the adjusted period is used instead.
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•  For example, in an 8-hour settlement period with a 5-second sampling interval there are 5,760 samples. The most recent sample has a weight 5,760 times that of the earliest sample, so recent market conditions have the greater effect on the rate.
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3. 3. Calculate the Funding Rate. 
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5. The Average Premium Index is adjusted toward the interest rate and then limited by the platform’s cap and floor:
6. - Funding Rate = Average Premium Index + clamp(Interest Rate − Average Premium Index, −0.05%, +0.05%)

• - Final Funding Rate = clamp(Funding Rate, Funding Rate Floor, Funding Rate Cap)
• Here, clamp(x, min, max) means: if x is less than min, the result is min; if x is greater than max, the result is max; otherwise the result is x. The cap and floor are set uniformly by the platform.
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How Funding Fees Are Settled

The Funding Fee is the amount a position pays or receives in one settlement:

Funding Fee = Mark Price × Position Quantity × Contract Value × Funding Rate

The Mark Price is the contract’s reference price used for position valuation (see Contract Mark Price).

Funding fees are settled at the end of each settlement period, which is every 8 hours by default. The system automatically deducts or adds the fee to the holder’s account:

• - Funding Rate positive: Long Position pays, Short Position receives.
• - Funding Rate negative: Short Position pays, Long Position receives.
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Settlement Interval Adjustment

Under extreme market conditions, the platform may temporarily change the settlement interval for certain Perpetual Contracts. This can happen when the Funding Rate reaches its cap or floor, or when other risk controls are needed. For example, the interval may change to every 4 hours or every 1 hour. The current settlement interval and the next settlement time are shown on the trading page.

Examples

The examples below use illustrative prices and rates for a Gold Perpetual Contract, where one contract has a contract value of 1 oz.

Example 1: Positive Funding Rate (Long Position Pays)

Market sentiment is bullish. The contract price is above the Index Price, and the Funding Rate is +0.01%.

• - Position: 1 lot Gold Long Position, Mark Price 3,300 USD, contract value 1 oz.
• - Funding Fee = 3,300 × 1 × 1 × (+0.01%) = +0.33 USD (Long Position pays).
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In this settlement, 0.33 USD is deducted from the Long Position account and transferred to Short Position holders. If you hold a 1-lot Short Position instead, you receive 0.33 USD in this settlement.

Example 2: Negative Funding Rate (Short Position Pays)

Market sentiment is bearish. The contract price is below the Index Price, and the Funding Rate is -0.03%.

• - Position: 2 lots Gold Short Position, Mark Price 3,200 USD, contract value 1 oz.
• - Funding Fee = 3,200 × 2 × 1 × (−0.03%) = −1.92 USD (Short Position pays).
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In this settlement, 1.92 USD is deducted from the Short Position account and transferred to Long Position holders. If you hold a 2-lot Long Position instead, you receive 1.92 USD in this settlement, because a negative Funding Rate makes Long Position holders the net receivers.

Important Notes

• - You pay a Funding Fee only if you still hold the position at the settlement time. Closing the position before settlement avoids the fee for that period.
• - The Funding Rate can be positive or negative. When the rate is positive, Long Position holders pay; when it is negative, Short Position holders pay.
• - The size of the Funding Rate follows the current contract premium. A higher premium means a higher rate and a higher cost for holding a Long Position.
• - If you hold a position across several settlement periods, or hold a large position in a high-rate market, Funding Fees can add up to a significant cost. Include them in your overall trading cost calculation.
• - For trading fee calculation, see Perpetual Contract Fees, which is the authoritative source.