Mark Price

MUFEX implements a fair price marking methodology to prevent users from unnecessarily forced liquidation. Without this system, the latest traded price could deviate unnecessarily from the price index due to market manipulation or lack of liquidity, resulting in unwarranted forced liquidations. MUFEX uses the mark price instead of the latest traded price as a triggering mechanism for liquidation.

Calculation formula:

Mark price = Median of (Price 1, Price 2, Last traded price)

Price 1 = Index price Γ— [1 + Latest funding rate Γ— (Time until next funding rate collection / Funding rate interval)]

Price 2 = Index price + 30-minute moving average

30-minute moving average = Moving average [(Bid price + Ask price) / 2 βˆ’ Index price] taken at 30-minute intervals, sampled every second.

Note: This means that after your order is executed, you may immediately see a positive or negative unrealized profit and loss. This occurs due to a slight deviation between the mark price and the executed price. It does not imply that you have lost funds, but it is important to monitor your liquidation price and avoid being forcibly liquidated prematurely.

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