Funding is paid every 8 hours to only those holding positions at 04:00, 12:00, 20:00 UTC time. Funding is paid on the USD notional value (calculated using Mark Price) of the position. When the Funding Rate is positive, longs pay the shorts, and when the Funding Rate is negative, shorts pay the longs. A damper of 0.05% is applied to the Funding Rate.
The Funding Rate is calculated in 2 steps:
- Minutely Premium Rate (PR) = ((Mark Price - Index) / Index) * 100%
- PR is calculated every minute
- 8 Hr Premium Rate (P) used in Funding Rate calculation is the 8 hour time weighted average of PR, used in the payment 8 hrs from current calculation period
- If P is within +/-0.05%, then F = 0
- If P > 0.05%, then F = P - 0.05%
- If P < 0.05%, then F = P + 0.05%