Funding consists of regular payments between buyers and sellers, according to the current funding rate. When the funding rate is above zero (positive), traders that are long (contract buyers) have to pay the ones that are short (contract sellers).
In contrast, negative funding rates mean that short positions pay longs. When a perpetual futures contract is trading higher than the spot markets, long positions have to pay shorts due to a positive funding rate. Such a situation is expected to drive the price down, as longs close their positions and new shorts are opened.
On the Digitex exchange, funding occurs every 8 hours at 00:00, 08:00, 16:00 UTC. If a trader holds a position, he/she will pay or receive payout value.
Funding rate depends on the Premium Index (PI)
PI = Max(0, IBP-FP) x FR-Max(0,FP-IAP) x FP
PI is calculated each minute.
where: IBP (Impact Bid Price) - Bid price for BTC IAP (Impact Ask Price) - Ask price for BTC and Fair Price (FP): Fair price = Spot Price(1+Funding Rate Time Until Funding8 hours)
Funding Rate: Funding Rate*= TAPI + clamp(I - TAPI, 0.05%, - 0.05%) where: I = 0.01%, TAPI that are average PI for previoгs trading period.
Funding Rate= сap(Funding Rate*, 0.75immm) where: im=1%, mm=0.5
The value that the trader must pay or receive at the moment of funding depends on the number of contracts in the trader’s position.
Payout value = q * Payout
Payout = Funding RatePerpetual PriceTick Index, that is rounded to 10-4 Perpetual Price = avg Price for last 1000 traded contracts
When a trader receives funds, the payout value is added to the balance. When a trader pays funds, the payout value is withdrawn from the position margin and balance.
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