What is a Funding Fee:
Perpetual contracts have no expiration or delivery. To prevent the "last traded price" from deviating from the spot price, PerpVia uses a "funding fee mechanism" to anchor the contract price to the spot price.
Perpetual contracts have an 8-hour funding period. Settlement occurs at the end of each period at 16:00 (UTC), 00:00 (UTC), and 08:00 (UTC). Funding fees are generated at settlement, and only users holding positions at settlement need to pay or receive funding fees; if a position is closed before settlement, no funding fees are charged or paid.
How to Check the Funding Rate:
Traders can view the current market funding rate in the "Funding Rate" indicator section at the top of the market chart. Historical rates can be found in the Funding Rate History.
Funding Rate Calculation:
Funding Rate = Average Premium Index + clamp((Interest Rate - Average Premium Index), -0.05%, 0.05%)
Premium Index = [(Contract Best Bid Price + Contract Best Ask Price) / 2 - Spot Index Price] / Spot Index Price, calculated every minute
Average Premium Index = (1 * Premium Index_1 + 2 * Premium Index_2 + 3 * Premium Index_3 + ··· + n * Premium Index_n) / (1 + 2 + 3 + ··· + n)
Premium Index_1: the first premium index data point, calculated over the past N hours where N is the funding interval, with n equal to N*60
Please note, the funding rate here represents an estimate of the premium index over the past 8 hours. For example, starting at 09:00 UTC, the funding rate calculation will use premium index data from 01:00 UTC to 09:00 UTC (not from 08:00 UTC to 09:00 UTC).
Funding Fee Calculation:
Funding Fee = Position Value * Funding Rate
Position Value = Contract Quantity * Mark Price
Example:
Trader A holds a long position of 1 BTC contract. At this time, the BTCUSDT contract mark price is 60,000 USDT, and the current funding rate is 0.01%.
First, we calculate Trader A’s position value:
Position Value = 1 x 60,000 = 60,000 USDT
Next, we calculate the funding fee that Trader A must pay:
Funding Fee = 60,000 x 0.01% = 6 USDT
Since the funding rate is positive (0.01%), long position holders must pay this fee to short position holders. Therefore, Trader A must pay 6 USDT in funding fees, and the short position holders with the same contract quantity will receive 6 USDT in funding fees.
Disclaimer and Risk Warning
All trading tutorials provided by PerpVia are for educational purposes only and should not be considered financial advice. The shared strategies and examples are for reference only and may not reflect actual market conditions. Cryptocurrency trading involves significant risks, including the potential loss of capital. Past performance does not guarantee future results. Please conduct thorough research and understand the risks involved. PerpVia is not responsible for any trading decisions made by users.