MUFEX
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English
  • What is MUFEX?
    • πŸ“–Overview
    • 🏦MUFEX's Decentralized and Trustless Approach
    • πŸ“ˆMUFEX Perpetual Trading System
    • πŸ’ŽMUFEX Liquidity Pool
    • πŸ—ΊοΈRoadmap
  • Start Using MUFEX
    • πŸ‘©β€πŸš€Onboarding
    • πŸ’΅Depositing
      • Deposit FAQ
        • What should I do if the deposited currency has not been received?
        • How to solve recharge error?
        • Funds Recovery Guide
    • πŸ“ˆTrading
      • πŸ’ΉOpen/Close Positions
      • πŸ’²Trading Fees
      • πŸ–₯️Market , Limit & Conditional Order
      • πŸ›°οΈTake Profit & Stop Loss
      • 🏝️Isolated Margin/ Cross Margin
      • πŸ“Trading Rules
        • Risk Limit
        • Risk limit Parameters
        • Index Price
        • Mark Price
        • Liquidation Process
        • Margin Mechanism
        • Funding Fee
        • Insurance Fund
        • Auto-Deleveraging (ADL)
      • πŸ“‘Contract Specs
    • πŸ’ŽEarn
    • 🏧Withdrawal
      • Withdrawal FAQs
        • Why Hasn't My Withdrawal Been Credited?
    • πŸ’²Fee Rates
  • Technical Solution
    • πŸ—οΈTechnology Architecture
    • 🏦ZK-Rollup Asset Proof Design
    • πŸ›₯️Dunkirk Asset Recovery
  • What makes MUFEX secure?
    • πŸ“‘MUFEX Security White Paper
      • Security Team and Its Functions
      • Client Security
      • Endpoint Security
      • Network Security
      • Server Security
      • Application Security
      • Smart Contract Security
      • Data Security
      • Physical Infrastructure Security
    • πŸ“”Smart Contracts
    • πŸ”Audit
    • 🐞Bug Bounty
  • Testnet
    • πŸ§‘β€πŸ³Testnet Walkthrough
      • 1️⃣Get started with MUFEX
      • 2️⃣Get Test Tokens
      • 3️⃣Account & Assets
      • 4️⃣Depositing & Withdrawing
      • 5️⃣Trading
      • 6️⃣Earn via MLP
      • 7️⃣Feedback
      • 8️⃣Common Questions
  • Support
    • πŸ””MUFEX Announcement
      • Notice on Upgrade and Adjustment of the Affiliate System
      • MUFEX Upcoming Delisting of Trading Pairs Reminder
      • MUFEX Notice: Delisting of Certain Trading Pairs
      • MUFEX Coin Pair Adjustment Notice
      • MUFEX is Upgrading MLP and Copy Trading Features
      • MUFEX to Discontinue MLP and Copy Trading Services
      • MUFEX Announcement: Notice on Delisting COMPUSDT and GMTUSDT Contracts
      • MUFEX Announcement: System Upgrade and Trading Suspension Notice Postponement
      • System Upgrade and Trading Suspension Notice
      • MUFEX Cryptocurrency Exchange Service Area Statement:
      • Adjusting Parameters for Certain Contract Trading Pairs (2024/2/7)
    • ❓FAQ
      • How to Delete My MUFEX Account?
      • Why is my IP banned from service
      • Can I use MUFEX service if I don't have an web3 wallet
      • Why do I need to deposit first?
      • Why didn't I see the asset balance change after I deposit?
      • Why did I receive an email from Unipass?
      • What is Effective Leverage?
    • πŸ‘©β€πŸ”¬Help Center
    • πŸ“Release Log
    • πŸ‘¨β€πŸ«MUFEX Affiliate Program
    • πŸ’»Social Media & Communities
    • πŸ’ΌBusiness Cooperation
    • πŸ“±Install MUFEX through the App Store
      • How to get an Apple ID in the US
      • How to use Taobao Purchase a non-mainland Apple ID
      • How to install MUFEX iOS TestFlight
    • πŸ™‹β€β™‚οΈEarly Ambassador Program
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  1. Start Using MUFEX
  2. Trading
  3. Trading Rules

Funding Fee

Funding is the primary mechanism to ensure MUFEX’s last traded price is always anchored to the global spot price.

On MUFEX,

  • The funding fee is exchanged directly between buyers and sellers at the end of every funding interval*. Using an 8 hour funding time interval as example funding will occur at around 16:00 UTC, 00:00 UTC and 08:00 UTC.(To ensure fairness in trading and market balance, the actual calculation time will occur around the hour. MUFEX will settle the funding fees for users with open positions during this time. This process is designed to reflect the differences in market funding costs and adjust the impact of market leverage. The calculation of the funding rate is fully automated to ensure transparency and efficiency in the trading process.οΌ‰

  • When the funding rate is positive, long position holders pay the short position holders. Likewise, when the funding rate is negative, short position holders pay the long position holders.

  • Traders will only pay or receive funding fee if they hold a position at one of these times.

  • If positions are entirely closed prior to the funding exchange then traders will not pay or receive funding fee.

  • The funding fee charged will be deducted from trader's available balance. In the event where trader has no sufficient available balance, the funding fee will be deducted from the position margin and the liquidation price of the position will be more prone to the mark price. The risk of liquidation will increase.

*Every trading symbol will have its own funding time interval and MUFEX may adjust the funding time interval based on live market situation when there is a significant price gap between Last traded price and Mark Price.

Funding Fee is calculated as follows:

Funding Fee = Position Value * Funding Rate

Position Value = Quantity of Contract * Mark Price

Example:

Trader A holds a long position of 10 BTC contracts and the Mark Price is 18,000 USDT at the funding timestamp with the current funding rate at 0.01%.

First, let’s calculate the Position Value:

Position Value = 10 x 18000 = 180,000 USDT

With the Position Value, let’s calculate the Funding:

Funding Fee = 180,000 x 0.01% = 18 USDT

As the funding rate is positive (0.01%), the long position holders have to pay the short position holders. Hence, Trader A has to pay a funding fee of 18 USDT and a short position holder with the same quantity of contracts will receive 18 USDT.

The funding rate is calculated as follows:

The funding rate consists of two components: interest rate and premium index.

1. Interest Rate:

Each contract on the platform consists of two currencies: the base currency and the quote currency. The interest rate refers to the rate between these two currencies, indicating the changes between the quote currency (e.g., USD) and the base currency (e.g., Bitcoin) during the funding timestamp.

2. Premium Index:

Perpetual contracts may have a significant premium or discount relative to the mark price. In such cases, the premium index is used to adjust the funding rate for the next funding period.

Premium Index (P) = [Max(0, Impact Bid Price - Mark Price) - Max(0, Mark Price - Impact Ask Price)] / Mark Price

Impact Bid Price = Average price when the buy queue reaches the "impact margin notional"

Impact Ask Price = Average price when the sell queue reaches the "impact margin notional"

Mark Price is the weighted average of the underlying spot assets listed on major cryptocurrency exchanges.

Impact Margin Notional (IMN) is used to determine the average price of the impact bid or ask prices in the order book.

Average Premium Index (P) = (1 * Premium Index_1 + 2 * Premium Index_2 + 3 * Premium Index_3 + ... + n * Premium Index_n) / (1 + 2 + 3 + ... + n)

3. Funding Rate:

The initial funding rate is calculated based on the interest rate and premium index over the last 8 hours.

Funding Rate (F) = Average Premium Index (P) + Clamp(interest rate - Premium Index (P), 0.05%, -0.05%)

*Here, Premium Index (P) refers to the current average premium index.

The final funding rate is calculated based on the initial funding rate, the previous funding rate (T-1), initial margin, and maintenance margin. The funding cost or payment is settled based on the final funding rate at the funding timestamp.

By applying the final funding rate calculated above to the trader's position, the funding cost to be paid or received by the trader at the funding timestamp can be settled.

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Last updated 1 year ago

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