Many users of perpetual contracts will encounter a confusion: why my position has not been reduced, but the position margin has fluctuated and decreased or increased? This is mainly due to the funding fee mechanism of the perpetual contract and fluctuations in market prices.
Funding Fee Mechanism
The BitVenus perpetual contract uses a funding fee mechanism to anchor the market price of the perpetual contract to the spot price.
Funding fees are charged every 8 hours at 0:00, 08:00 and 16:00 (GMT+8) every day. Users are only required to pay or receive funding fees while holding a position at that moment. If the position is closed before the fee is charged, no funding fee will be charged.
Funding fee = position value * current funding rate, when the funding rate is positive, longs pay shorts; when the funding rate is negative, shorts pay longs, that is to say, every user who holds a perpetual swap position A funding fee may be charged and a funding fee may be issued. The actual funding fee that the user can charge also depends on the total amount deducted from the counterparty's account by the system.
In the cross-margin mode: opening margin = face value * number of contracts * latest mark price/leverage, so the user's opening margin will change with price changes, and funding costs have little impact on the margin.
BitVenus does not charge any funding fees; funding fees are collected between users.
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