1. What are funding fees

There is no expiration or delivery for Futures perpetual contracts on CoinEx. Instead, CoinEx has introduced a Funding Fee system to ensure that the Futures market price anchors and remains close to Spot market price. Once there is a price difference between the perpetual contract market and the spot market, the position holders in this Futures market will need to pay funding fees periodically to its long or short traders.

2. Funding fee settlement

(1) Settlement cycle

Calculated per minute, normally the funding fees are paid or received every 8 hours, at 00:00, 08:00 and 16:00 (UTC) on a daily basis, and the traders will only pay or receive funding fees if they hold a position at the time of settlement. If the market premium rate is too high, we may dynamically adjust the settlement cycle to 4 hours or 2 hours.

(2) Settlement form

Whether you should receive or pay funding fees at settlement is determined by the current funding rate and your position - When the funding rate is positive, the long position holders will pay the funding fee to short position holders. Likewise, when the funding rate is negative, short position holders will pay the funding fee to long position holders.

Note: CoinEx takes no fees from funding fees as they happen directly between the long and short position holders.

3. Theoretical Funding Fees

Funding Fee = Position Size * Mark Price * Funding Rate

Funding rate (F) = clamp(Average premium index (P+) + clamp(Interest rate (I) - Average premium index (P+), ±d) , a , b)

4. Actual Funding Fees

(1) Under cross-margin mode

The funding fee will be directly deducted from users' realized PNL. In maximum cases, when the margin rate reaches the sum of the maintenance margin rate and closing fee rate, the excess part will not be deducted.

(2) Under isolated-margin mode

The funding fee will be preferentially deducted from users' realized PNL. If the realized PNL is not enough, the excess part will be deducted from the fixed position margin. In maximum cases, when the margin rate reaches the sum of the maintenance margin rate and closing fee rate, the excess part will not be deducted.

Notes:

(1) The funding fee will be deducted based on the funding rate calculated at the current settlement time.

For example, the average premium index at 20:00 (UTC+8) is calculated based on the arithmetic average of the premium indices within the funding period from 16:00 to 20:00 (UTC+8).

(2) The actual amount of Funding Fee that can be deducted each time depends on the total amount that can be systematically deducted from the payers' accounts.

5. Funding Rate Description

(1) Calculation

Fixed interest rate (I) = 0

Premium index (P) = ((Depth-weighted bid price + Depth-weighted ask price)/2 - Spot index price)/Spot index price

Average premium index (P+) = Moving average of premium index per minute from N hours ago to the current time point.

Funding rate (F) = clamp(Average premium index (P+) + clamp(Interest rate (I) - Average premium index (P+), ±d) , a , b)

*a,b are the upper and lower limits of the funding rate, while d is the added buffer coefficient with a value of 0.03%. N hours refers to the time interval for collecting funding fees.

(2) Upper and lower limits

Lower limit a = -0.75 * Minimum initial margin ratio

Upper limit b = 0.75 * Minimum initial margin ratio

For specific margin ratios please refer to CoinEx Futures - Contract Info

*The BTCUSDC and ETHUSDC markets have a specific setting of ±0.75%

(3) Depth-weighted price

Margin impact amount = Max position size openable under minimum maintenance margin ratio * 0.01

Define "p" as the quantity/lot size of the underlying (assume the quantity/lot size of the nth level is pn), and "q" as the price of the quote currency.

For long contracts, depth-weighted price = (p1 * q1 + p2 * q2 + ... + pn * qn) / margin impact amount, where p1 + p2 + ... + pn = margin impact amount (in units of BTC or ETH, etc.)

For short contracts, depth-weighted price = margin impact amount / (p1 / q1 + p2 / q2 + ... + pn / qn), where p1 + p2 + ... + pn = margin impact amount (in lots)

(4) Dynamic settlement cycle

The default funding rate settlement cycle is 8h. When the premium is too high, it can be dynamically adjusted to 4h or 2h.

In the futures market, if the 1h arithmetic average premium index exceeds the upper/lower limit of the funding rate for that market for 4 consecutive hours, the settlement cycle will automatically decrease by one level in the current cycle, down to a minimum of 2h intervals, with an 8h quiet period after each adjustment.

After the funding rate settlement cycle is adjusted, it will default to charging 24/adjusted interval times (approx. 24 hours). If another trigger occurs during this period, the time will be reset. After each charging cycle is completed, it will increase by one level (approx. 24 hours) until the default settlement cycle is restored.

Note: The above data and indicators are subject to real-time adjustments based on market conditions without further notice.