Dear BitVenus users,
BitVenus contract about funding fee
1. Funding fee introduction
Funding fee is the core operating mechanism of BitVenusperpetual contract.
The setting of the funding fee aims to ensure that the transaction price of the perpetual swap contract closely follows the underlying reference price through the regular exchange of funding fees between the long and short parties.
2. Explanation of capital expenses
1) BitVenus does not charge any funding fees, which are charged between users.
2) Funding fees are generated every 8 hours, respectively at 00:00 , 08:00 , and 16:00 [GMT+08:00] . You only need to pay or collect funding fees when you hold positions at these three funding time stamps .
3) When the fund fee is collected, it will be deducted from the fixed margin of the user's position. At most, it will be deducted until the user's margin rate is equal to the maintenance margin rate and there is a certain percentage of the remaining amount, and the excess will not be charged. The actual funding fee that the user can charge also depends on the total amount deducted from the counterparty's account by the system.
*Only users who hold positions at the time of settlement need to charge or pay funding fees; if the positions have been closed before settlement, no funding fees need to be charged or paid.
3. Funding cost calculation
The funding fee you receive or pay is calculated as follows:
[Funding Fee] = Funding Rate * Position Value
The value of your position has nothing to do with leverage and is not based on how much margin you have allocated to that position:
Contract position value = face value * number of contracts * latest mark price
When the funding rate is positive, the longs pay the shorts; when the funding rate is negative, the shorts pay the longs.
Among them, the funding rate calculation formula is as follows:
Funding rate ( F ) = premium index ( P ) + clamp ( interest rate ( I ) - premium index ( P ) , 0.05%, -0.05% )
= average premium index + clamp ( comprehensive interest rate – average premium index, premium deviates from the upper limit, premium deviates from the lower limit ) , funding rate upper limit, funding rate lower limit)
Clamp is an interval limiting function. When the target value exceeds the upper and lower limits, only the boundary value will be taken. Such as clamp ( a, max, min ) , when a > max, the result is max; when a < min, the result is min; when max ≥ a ≥ min, the result is a.
Comprehensive interest rate – the average premium index, limited by the upper limit of the premium deviation and the lower limit of the premium deviation, between the two; the final forecast of the funding rate for the next period, limited by the upper limit of the funding rate and the lower limit of the funding rate, between the two between.
Interest rate = The interest rate depends on the borrowing rate of the base currency and the pricing currency itself.
Interest rate ( I) = ( pricing interest rate index - base interest rate index ) / funding rate interval
Premium Index = Premium Index ( P) = (Max (0, Depth Weighted Bid Price - Mark Price ) - Max (0, Mark Price - Depth Weighted Sell Price )) / Spot Price + Reasonable Basis of Mark Price
BitVenus official website: https://www.bitvenus.me
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