What is funding rate?

Funding rate consists of two parts: Interest Rate and Premium Index.

Interest Rate (I)

• Interest Quote Index = The Interest Rate for borrowing the Quote currency
• Interest Base Index = The Interest Rate for borrowing the Base currency
• Funding Interval = 3 (Since funding occurs every 8 hours)

Interest Quote Index = 0.06%, Interest Base Index = 0.03%

Formula: The Interest Rate = (0.06%-0.03%)/3 = 0.01%.

Premium Index (P)

Perpetual contracts may trade at a premium or discount from the Mark Price. In this situation, a Premium Index will be used to raise or lower the next Funding Rate to be level consistent with where the contract is trading. On Zoomex’s website, history records of Premium Indexes (.BTCUSDPI; Premium Index) can be found at the Index section under the 'Contracts' tab.

Premium Index (P)=Max(0, Impact Bid Price - Mark Price) - Max(0, Mark Price - Impact Ask Price)Index Price+Funding Rate of Current Interval∗Time Until Next Funding Interval Premium Index (P)=Max(0, Impact Bid Price - Mark Price) - Max(0, Mark Price - Impact Ask Price)Index Price+Funding Rate of Current Interval∗Time Until Next Funding Interval Funding Rate (F)=Premium index (P) + clamp (Interest rate (I) - Premium index (P), 0.05%, -0.05%)Funding Rate (F)=Premium index (P) + clamp (Interest rate (I) - Premium index (P), 0.05%, -0.05%)

Impact Margin Notional is the notion available to trade with 0.1 BTC/2 ETH/200 EOS/ 2000 XRP/ 1000 DOT / 50,000 USDT worth of initial margin and is used to determine how deep in the order book to measure either the Impact Bid or Ask Price.

Funding Rate Calculation

zoomex calculates the Premium Index (P) and Interest Rate (I) every minute and then performs an 8-Hour Time-Weighted-Average-Price (TWAP) over the series of minute rates.

The Funding Rate is next calculated with the 8-Hour Interest Rate Component and the 8-Hour Premium / Discount Component. A +/-0.05% dampener is added.

Funding Rate (F) = Premium Index (P) + clamp(Interest Rate (I) - Premium Index (P), 0.05%, -0.05%)

Hence, if (I - P) is within +/-0.05% then F = P + (I - P) = I. In other words, the Funding Rate will equal the Interest Rate.

This calculated Funding Rate is then applied to a trader’s Position Value to determine the Funding Fee to be paid or received at the Funding Timestamp.

For the majority of contract pairs, funding fees are settled three times daily, precisely at 8:00 AM, 4:00 PM, and 12:00 AM UTC. Settlements occur promptly upon reaching these designated times.

Please note that certain contract pairs may have slightly different funding schedules, primarily influenced by market volatility. We recommend consistently checking the trading page for the most up-to-date and accurate information on these pairs.

Zoomex reserves the right to adjust the funding settlement times as needed to align with market demands. Such adjustments may occur without prior notice to users.

Funding Rate Limit

Traders may check on the funding rate, which will fluctuate in real time until the upcoming funding timestamp. The funding rate is not fixed, and is updated every minute, according to the Interest Rate and Premium Index, which affects the calculation of the funding rate until the end of the current funding interval.

Kindly refer to the page for checking the Real-Time Funding Rate and Historical Funding Rate.

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