Direct Charge from Balance
The funding amount is directly charged from the trader’s available balance.
For Crypto Brokers
Funding — Stability & Balance
The Funding functionality applies to perpetual futures trading, involving periodic payments exchanged between long and short holders to align the contract price with the underlying asset’s market price.
This mechanism ensures that the perpetual futures price remains stable and reflective of the real market conditions. Funding fees can either be a credit or a charge, depending on the funding rate’s direction relative to position holding.
Key Specifics of Funding
Margin Impact
Funding can decrease the margin level to the Margin Call (MC) or Stop Out (SO) levels.
Negative Balance Potential
Funding can result in negative balance values, but only within the root asset.
Applicable Positions
Only perpetual positions open at the funding settlement time are considered for calculating the funding size.
Instrument Restriction
Funding can only be set if the instrument type is perpetual futures.
Funding Fee Calculation
Based on position size, lot size, mark price, funding rate, and the rate to the Root Asset Type (RAT).
Dynamic Funding Rate
A rate set in percentages, ranging from -10% to 10%, allowing precise control over funding dynamics between positions.
Regular Settlement Intervals
Funding settlements occur at defined intervals, supporting consistent market price alignment.
Funding Impacts
The funding operation can either decrease (positive for broker; negative for trader) or increase (negative for broker; positive for trader) the account funds.
Root Asset Funding
All funding fees when added are added in the root asset.
How It Works
Fee Calculation
The calculation considers the current position size in lots, standardized lot size, mid-spread mark price, configured funding rate, and the conversion rate to RAT.
Funding Fee =
Position sizeLot sizeMark priceFunding, %Rate to RAT
The basis of PF trading
From Individual Gains to Systemic Improvements
Funding delivers advantages across the trading ecosystem — from price stability to strategic earnings and balanced market participation.
Market Stability
Keeps perpetual futures prices tethered to spot market values, reducing arbitrage opportunities, and enhancing price stability.
Strategic Earnings
Traders can potentially earn from funding fees if positioned optimally according to positive or negative rates.
Market Participation Encouragement
Encourages balanced long and short market participation, mitigating extreme price divergences.
Enhanced Trading Infrastructure
Provides a systematic approach for brokers to manage pricing consistency and trader engagement in futures markets.
FAQ
It aligns the perpetual futures contract price with the spot market price by exchanging periodic payments between longs and shorts, depending on the funding rate.
The funding fee equals Position size × Lot size × Mark price × Funding rate (%) × Rate to RAT. The calculation considers the current position size in lots, standardized lot size, mid-spread mark price, configured funding rate, and the conversion rate to the Root Asset Type.
The funding amount is charged directly from the trader’s available balance in the root asset. If the balance is insufficient, negative balance values may occur within the root asset, potentially triggering margin call or stop out levels.
Funding settlements occur at defined intervals configured by the broker platform admin, supporting consistent alignment between perpetual contract prices and spot market values.
Yes. Funding fees can be a credit or a charge depending on the funding rate direction. Traders positioned on the receiving side of the funding rate can earn periodic payments when rates move in their favor.
Funding can decrease the margin level toward Margin Call (MC) or Stop Out (SO) thresholds. If charges exceed available root asset balance, negative balance values may occur within the root asset, potentially leading to position liquidation per platform rules.
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