The funding mechanism in perpetual swap contracts is used to maintain the contract price close to the spot market price of the underlying cryptocurrency.
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Funding refers to periodic interest payments exchanged between traders holding positions in perpetual swap contracts. These payments ensure the perpetual swap price remains aligned with the spot price. Traders holding long positions pay funding to traders holding short positions when ...Read more
Funding fees are calculated based on the notional value of positions and the funding rate: Funding Fee=Notional Value of Positions×Funding Rate\text{Funding Fee} = \text{Notional Value of Positions} \times \text{Funding Rate} Funding Fee=Read more
Suppose a trader holds a long position of 10 BTC in BTCUSDT Perpetual Swaps with a mark price of $38,000 and a funding rate of 0.01%: Notional Value of Positions=10×$38,000=$380,000\text{Notional Value of Positions} = 10 ...Read more
To ensure stability, Flipster imposes cap and floor rates on the funding rate: −0.375%≤Funding Rate≤0.375%-0.375\% \leq \text{Funding Rate} \leq 0.375\% −0.375%≤Funding RateRead more
Funding fees are settled approximately 5 seconds after the funding timestamp. Positions opened or closed within 5 seconds of this timestamp may not be eligible for funding fee adjustments. Flipster reserves the right to adjust funding rate parameters under ...Read more
Perpetual swaps are cryptocurrency futures contracts that do not have an expiry date. They derive their value from an underlying cryptocurrency asset and allow traders to speculate on its future price movements.
Unlike traditional futures contracts, perpetual swaps use a funding mechanism to anchor their price to the spot market price of the underlying asset. If the perpetual swap price deviates from the spot price, funding fees are used to align them.
Funding rates are periodic interest payments exchanged between traders holding long and short positions in perpetual swaps. Traders holding positions pay or receive funding fees based on whether the swap price is above or below the spot market price.
Funding fees depend on the size of open positions and the underlying cryptocurrency asset. Traders should monitor funding rates closely as they may pay or receive fees for holding positions past the designated funding timestamp.