Funding Payment

What is Funding Payment?

Funding payment incentivizes users to execute trades that bring the Futures Price closer to the Oracle Price. Funding payment works as follows:

Oracle Price > Futures PriceOracle Price < Futures Price

Payment arrangement

Short positions pay long positions

Long positions pay short positions

Encourage users to open

Long positions

Short positions

Desired price change direction



When does Funding Payment Happen?

Traders receive or pay funding payment continuously.


Funding payment is calculated as follows:

FundingPayment=āˆ‘(FundingRateāˆ—PositionSize)Funding Payment =\sum (Funding Rate *PositionSize)

The Funding Rate can be calculated as follows:

FundingRate=(fāˆ’o)(o)āˆ—Ī“time86400Funding Rate =\frac{(f -o)}{(o)}*\frac{\delta time}{86400}

where ff is the 15-minute TWAP of Futures Price and oo is the Oracle Price (see Oracle page). Since funding payment, as mentioned above, is paid / received continuously, so the funding rate is adjusted based on the amount of time that the funding rate has lasted.

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