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Funding fee

Bijgewerkt

USDT-M perpetual contracts have no expiry or delivery date. Their price is anchored to the spot market through the **funding fee mechanism**.

1. Settlement time and rules

  • Settlement cycle: The interval is 8 hours, with three settlements per day.

  • Settlement time (UTC+8):

    • 00:00-08:00 (settled at 08:00)

    • 08:00-16:00 (settled at 16:00)

    • 16:00-00:00 (settled at 00:00)

  • Who pays/receives: Only users holding positions at the time of settlement will pay or receive funding fees. Positions closed before settlement are not included.

  • Fee flow: Funding fees are exchanged directly between users. The platform does not charge any fees.

    • When the funding rate is positive (+): Longs pay shorts.

    • When the funding rate is negative (-): Shorts pay longs.

2. Funding fee calculation

Calculation:

Funding fee = Net position * Settlement price * Funding rate

  • Net position = Long position size − Short position size

  • Note: If both cross margin and isolated margin are supported, funding fees are calculated separately for each account.

3. Funding rate calculation

The funding rate is designed to keep the contract price aligned with the underlying reference price. Each period's rate is derived from data in the previous period, fixed at the start of the current period and remains unchanged throughout.

1. Comprehensive rate (interest rate): Contracts on AlphaX consist of a base currency and a quote currency (e.g. BTC/USDT).

  • Base currency interest rate: Daily lending rate of the base asset (e.g. BTC).

  • Quote currency interest rate: Daily lending rate of the quote asset (e.g. USDT).

  • Comprehensive rate = (Quote currency interest rate − Base currency interest rate) / Funding settlement frequency.

  • Currently, the comprehensive rate for all perpetual contracts is fixed at 0.01%.

2. Premium index: The premium index reflects the deviation between the contract price and the fair price.

  • Fair price = Index price * (1 + Funding rate).

  • Depth-weighted bid/ask price: The average buy or sell price at which cumulative order book depth reaches 8,000 USDT.

  • Average premium index: The arithmetic mean of premium index values over the past 8 hours, calculated every minute.

3. Next funding rate estimate

Next funding rate = clamp(Average premium index + clamp(Comprehensive rate - Average premium index, Premium deviation upper bound, Premium deviation lower bound), Funding rate upper bound, Funding rate lower bound)

  • Note: Clamp is a bounding function that restricts values within defined upper and lower limits.

4. Special cases for funding fees

To protect users with low margin ratios, the system applies a **maximum payable funding fee cap**. If a user's available equity is insufficient, only the capped amount will be charged, and any excess will not be collected.

Formula:

Maximum payable funding fee = max(0, Static equity - Adjustment coefficient * abs(Net position) * Contract face value * Settlement price / Leverage)