How are funding fees calculated and charged for on-chain perpetual futures?
What's the funding rate?
The funding rate helps keep a perpetual futures contract's price close to its index price. Funding fees are exchanged between long and short position holders. The platform does not charge a funding fee.
Who pays the funding fee?
When the funding rate is positive, long positions pay short positions
When the funding rate is negative, short positions pay long positions
Each long or short leg is settled separately. If you hold both a long and a short position in the same contract, the two legs don't offset each other for funding purposes.
When are funding fees settled?
Funding fees are settled every hour at the top of the hour. The rate shown for each hourly settlement is one eighth of the nominal eight-hour rate.
You only pay or receive a funding fee if you hold an open position at the settlement time.
How is the funding rate calculated?
On-chain trading compares the contract's impact bid and impact ask prices with its index price. It samples the premium index every five seconds and applies a weighted average over a rolling one-hour window. Newer samples have more weight than older samples.
The final rate also includes the interest-rate component, any configured premium damper or multiplier, and the funding-rate cap / floor for the contract.
Funding rate = clamp( (weighted average premium index + clamp(interest rate − weighted average premium index, ± premimum damper)) ÷ (8/N) * Multiplier, ± funding cap)
Interest rate = 0.01% (fixed across all settlement intervals)
N = the contract's funding settlement interval, in hours.
The average premium index at Tn = (1 × Premium index at T1 + 2 × Premium index at T2 + ... + n × Premium index at Tn) / (1 + 2 + ... + n).
Premium index = [Max (0, Impact bid price – Index price) – Max (0, Index price – Impact ask price)] / Index price
Impact bid price = The average fill price to sell a set of impact notional (impact base notional * Max Leverage) — uses the orderbook bid side
Impact ask price = The average fill price to buy a set of impact notional (impact base notional * Max Leverage) — uses the orderbook ask side
Impact base notional = 100 USD
Index price is directly derived from oracle
How is my funding fee calculated?
Your funding fee is based on your position value at settlement:
Position value = position size × mark price
If you're on the paying side, the amount charged is capped at your equity. The funding payment won't take your equity below zero by itself.
Charged funding fee (per position) =
min(Payer's position value × funding rate, max (equity, 0))
If you're on the receiving side, your payment is based on the amount collected from paying positions and is distributed in proportion to your position value.
Payout funding rate =
total charged funding fee ÷ total charged position valuePayout funding fee (per position) =
Receiver's position value × Payout funding rate
Why can the payout funding rate differ from the funding rate?
The funding rate shows the rate used to charge paying positions. The payout funding rate shows the rate actually distributed to receiving positions.
If some paying positions don't have enough equity to pay the full amount, less is collected and the payout funding rate is lower than the funding rate. On-chain trading doesn't add platform funds to cover this difference.
What's the difference between the predicted and settled funding rate?
The predicted funding rate is a live estimate for the next settlement. It refreshes every five seconds as the rolling premium index window changes.
The settled funding rate is locked at the settlement time. The final payout may still be lower if the full amount can't be collected from paying positions.
What happens when funding is paused?
When funding is paused for a contract, on-chain trading doesn't calculate, collect, or distribute funding fees for that settlement window. The trading page shows "Paused" instead of a rate and hides the settlement countdown.
Where can I check funding-rate history?
Open the "Funding Rate" tab on "Market Info" page to check its settlement time and funding rate. Your private "Cash Flow" tab on "My Trade" page shows the amount you paid or received for each settlement.
Crypto products involve significant risk. Prices can go up and down, and you may get back less than you put in. This article is for informational purposes only and is not financial, investment, or tax advice. Please do your own research and seek independent advice before making any investment decisions.