Funding
Funding Payment is a mechanism used in perpetual futures to encourage the perpetual contract’s mark price to align with the underlying index’s price.
Funding Calculations
Funding Rate Calculation Interval = Published every four hours (00:00 - 04:00, 04:00 - 08:00, 08:00 - 12:00, 12:00 - 16:00, 16:00 - 20:00, 20:00 - 00:00 UTC)
Funding Rate = Average Premium Rate
Average Premium Rate = MEAN (Premium Rate Per Minute) over the current 4-hour interval
Premium Rate Per Minute = ((Mark Price - Index) / Index) * 100%
Hourly Funding Rate = Average Premium Rate / 4
This rate will be the funding payment rate for each of the next four hours
Funding Settlement
Funding Payment Frequency = This follows the hourly Session Settlement described below
Hourly Funding Payment (USD) = Hourly Funding Rate * Position Size (USD)
In the Trading page, there will be the following indicators:
Current Funding:
This is the hourly funding payment rate (calculated from the previous interval) that will settle at the end of each of the current 4-hour interval shown (in UTC)
For example, if we are now in the 00:00 – 04:00 UTC interval, the same rate displayed will be used to perform funding settlements at 01:00, 02:00, 03:00, and 04:00 UTC.
Estimated Next Funding:
This is the estimated hourly funding payment rate at the end of each of the next 4-hour interval shown (in UTC)
Example
Assuming the session settlement time now is 02:00 UTC, a trader with an open position on BTCUSD Perpetuals should interpret the funding indicators as follows:
Current Hourly Funding Rate: -0.00150% (00:00 - 04:00 UTC)
02:00 UTC falls within the 00:00 - 04:00 UTC interval. This is the same rate used to settle funding on any open positions at the end of each hour in this 4-hour interval.
Estimated Next Funding Rate: -0.0060% (04:00 - 08:00 UTC)
This does not apply to the 02:00 session end settlement as the rate will only be effective during the 04:00 - 08:00 UTC interval.
Session Settlements
Session settlement occurs at the end of every hour (24 sessions per day at 00:00, 01:00, 02:00 … 23:00 UTC). This is known as the Session End Time.
The following will take place during session settlement at the end of each hour:
Funding settlement: When the Funding Rate is positive, long position holders pay short position holders. When the Funding Rate is negative, short position holders pay long position holders. The ‘Current Funding’ displayed in the Trading page is the rate for funding payment at the end of the hour. Check out the Funding section above for more details.
Rollover open positions: All open positions at the end of a trading session will be rolled over to the new session. The Average Price will be reset to the Mark Price at the end of that session, and the Unrealised PnL will be realised. The Realised PnL, together with any Unrealised PnL incurred during the trading session, will be withdrawable after settlement is complete.
Uncovered loss settlement: If there is an uncovered loss recorded during the trading session or after open position(s) roll over, the mechanisms in relation to the Insurance Fund and Socialised Loss Mechanism will be triggered. Under the Socialised Loss Mechanism, loss shared among the winners will be deducted from the Realised PnL immediately.
Let’s assume session settlement time is 03:00 UTC:
Initial Wallet Balance: 10,000 USD
Current Hourly Funding Rate for BTC Perpetual: 0.034% for 00:00 - 04:00 UTC
03:00 UTC falls within the 00:00 - 04:00 UTC interval. This is the rate used to settle funding on any open positions at the end of each hour.
Estimated Funding Rate for BTC Perpetual: -0.02% for 04:00 - 08:00 UTC
This does not apply to the 03:00 session end settlement as the rate will only be effective during 04:00 - 08:00 UTC.
No open orders
| Before Session Settlement | After Session Settlement |
Trader A | Before session settlement, the trader has closed all their positions and realised a profit of 1,000 USD.
Wallet Balance: 11,000 USD Withdrawable Balance*: 10,000 USD | The trader’s withdrawable balance now includes their profit of 1,000 USD. No funding PnL is incurred as they do not have any open positions.
Wallet Balance: 11,000 USD Withdrawable Balance*: 11,000 USD |
Trader B | The trader has an open short BTC perpetual position of 10,000 USD
In the hour’s session, they have not closed their position yet. They currently have an Unrealised PnL of -250 USD.
Wallet Balance: 10,000 USD Withdrawable Balance*: 10,000 + -250 USD - Initial Margin required for the open position | Funding Payment = 0.0340% * 10,000 = 3.4
Wallet balance is now 9,753.4 USD Wallet Balance + UPNL + Funding Payment = 10,000 + -250 + 3.4
The average price of the trader’s position is reset to the Mark Price.
Wallet Balance: 9,753.4 USD Withdrawable Balance*: 9,753.4 USD - Initial Margin required for the open position
|
Trader C | The trader has an open long BTC perpetual position of 15,000 USD
In the hour session before settlement, the trader has not closed their position. They have an Unrealised PnL of 250 USD
Wallet Balance: 10,000 USD Withdrawable Balance*: 10,000 USD - Initial Margin required for the open position | Funding Payment = 0.0340% * -15,000 = -5.1
Wallet balance is now 10,244.9 USD Wallet Balance + UPNL + Funding Payment = 10,000 + 250 - 5.1
The average price of the trader’s position is reset to the Mark Price.
Wallet Balance: 10,244.9 USD Withdrawable Balance*: 10,244.9 USD - Initial Margin required for the open position |
*Please refer to the Maximum Withdrawal FAQ article for more details on withdrawals.
If market circumstances require it, funding and settlement may be delayed at Crypto.com’s discretion.