I. The Role of the Funding Rate

Perpetual Contracts have no expiry or delivery date, and prices are determined by market supply and demand, which may diverge from the spot price over time. The Funding Rate periodically transfers funds between long and short holders to incentivize the market to return to equilibrium:

          - Contract Price > Index Price (too many longs) → Funding Rate is positive → Long pays Short → Suppresses long demand

          - Contract Price < Index Price (too many shorts) → Funding Rate is negative → Short pays Long → Suppresses short demand

II. Funding Rate Calculation Formula

The following formulas are based on the platform's internal definitions and present the complete funding rate calculation chain.

➡️Step 1: Instantaneous Premium Index (sampled 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 when an order of the "Impact Margin Amount" is fully executed in the order book:

Impact Margin Amount (DepthAmount) = Maximum Leverage × 200 USD

➡️Step 2: Average Premium Index (linearly weighted average)

Calculated once per minute by the platform, linearly weighting the instantaneous premium index values over the past settlement period in chronological order. The default settlement period is 8 hours; if the interval is adjusted, the actual adjusted period applies.

AvgPremiumIndex = Σ( PremiumIndex_i × i / Σ(i) ) (i = 1, 2, …, N, where N is the total number of samples)

            📚For example, in an 8-hour settlement period: with a 5-second sampling interval, there are 5,760 samples in total. The most recent sample has a weight 5,760 times that of the earliest sample, ensuring that recent market conditions have a greater impact on the rate.

➡️Step 3: Funding Rate

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)

clamp(x, min, max) means: if x < min, return min; if x > max, return max; otherwise return x. The cap and floor are configured uniformly by the platform.

III. Funding Fee Settlement

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

Settlement timing: At the end of each settlement period (e.g., every 8 hours), the system automatically deducts or adds the funding fee to the holder's account:

                   Funding Rate positive → Long pays, Short receives

                   Funding Rate negative → Short pays, Long receives

Funding Fee Settlement Interval Adjustment

Funding fees are settled every [8] hours by default. Under extreme market conditions, when the Funding Rate reaches its cap or floor, or when other risk control needs arise, the platform may temporarily adjust the settlement interval for certain Perpetual Contracts, such as changing to every 4 hours or every 1 hour. The specific settlement interval and next settlement time are shown on the trading page.

IV. Examples

Scenario 1: Positive Funding Rate (Long pays)

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

Position:

                        Holding 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 pays)

Result: 0.33 USD is deducted from your long position account in this settlement and transferred to the accounts of short position holders.

*Conversely: If you hold a short position (1 lot), you receive 0.33 USD in this settlement.

Scenario 2: Negative Funding Rate (Short pays)

Market sentiment is bearish, contract price is below the index price, and the Funding Rate is −0.03%.

Position:

                       Holding 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 pays)

Result: 1.92 USD is deducted from your short position account in this settlement and transferred to the accounts of long position holders.

*Conversely: If you hold a long position (2 lots), you receive 1.92 USD in this settlement — when the Funding Rate is negative, long position holders are the net beneficiaries.

            - Whether the Funding Rate is positive or negative is entirely determined by the market. There is no fixed rule that "longs always pay" or "shorts always pay." In sideways or short-dominated markets, long holders may have the opportunity to offset holding costs by receiving funding fees.

V. Important Notes

Only users who still hold a position at the settlement time will incur a funding fee. If you close your position before settlement, the fee is fully avoided.

The Funding Rate can be positive or negative. When the rate moves in one direction, one side pays while the other receives.

The magnitude of the Funding Rate is directly related to the current contract premium: the higher the premium, the higher the rate, and the greater the cost of holding a long position.

In high-rate environments, frequent holding or large positions spanning multiple settlement periods can accumulate substantial funding fee costs, which should be factored into overall trading cost calculations.