To promote funding rate magnitude in line with wider exchange venues, improve arbitrage incentives, and provide predictability of funding settlement rate for more stable position management, the Crypto.com Exchange will launch a new funding rate mechanism on 31 July 2023, 08:00 UTC.
Key Changes
| Change | Current | New |
|---|---|---|
| Funding Rate Interval | Published every hour Funding Rate = Average Premium Rate / 24 | Published every four hours* Funding Rate = Average Premium Rate |
| Funding Settlement | Hourly settlement At the end of the hour, Funding Payment = Funding Rate * Position Value (USD) | Hourly settlement At the end of each of the next four hours, Funding Payment = Funding Rate / 4 * Position Value (USD) |
| Change | Funding Rate Interval |
|---|---|
| Current | Published every hour Funding Rate = Average Premium Rate / 24 |
| New | Published every four hours* Funding Rate = Average Premium Rate |
| Change | Funding Settlement |
| Current | Hourly settlement At the end of the hour, Funding Payment = Funding Rate * Position Value (USD) |
| New | Hourly settlement At the end of each of the next four hours, Funding Payment = Funding Rate / 4 * Position Value (USD) |
* Funding Rate Calculation Intervals: 00:00 – 04:00, 04:00 – 08:00, 08:00 – 12:00, 12:00 – 16:00, 16:00 – 20:00, 20:00 – 00:00 UTC
Illustrated Changes
From 31 July 2023, 08:00 UTC, users eligible to trade derivatives will see following indicators in the Trading page:
- Current Funding:
- The hourly funding rate (calculated from the previous interval) that will settle at the end of each hour of the 4-hour interval displayed.
- For example, if we are now in the 00:00 – 04:00 UTC interval, the same rate displayed will be used to perform funding settlements at 01:00, 02:00, 03:00, and 04:00 UTC.
- Estimated Next Funding:
- The estimated hourly funding payment rate at the end of each hour in the next 4-hour interval shown (in UTC).
Example
Assuming the session settlement time is 02:00 UTC, a trader with an open position on BTCUSD Perpetuals should interpret the funding indicators as follows:
- Current Hourly Funding Rate: -0.00150% (00:00 – 04:00 UTC)
- 02:00 UTC falls within the 00:00 – 04:00 UTC interval. This is the same rate used to settle funding on any open positions at the end of each hour in this 4-hour interval.
- Estimated Next Funding Rate: -0.0060% (04:00 – 08:00 UTC)
- This does not apply to the 02:00 session end settlement as the rate will only be effective during the 04:00 – 08:00 UTC interval.
API Additions
The following Market Data Websocket Subscriptions will be also available for Crypto.com Exchange API users:
- Funding.{instrument_name}
- Existing channel that returns the fixed hourly rate which will settle at the end of the hour.
- Estimatedfunding.{instrument_name}
- New channel that returns the estimated hourly rate which will begin in the next interval.
Please refer to the API documentation for full details.
What are Funding Rates?
Funding Payment is a mechanism used in perpetual futures to encourage the perpetual contract’s mark price to align with the underlying index’s price.
When Funding Rates are positive, long position holders pay funding to the short position holders. When Funding Rates are negative, short position holders pay funding to the long position holders.
For more comprehensive information on funding payments, calculations and settlement time, please visit our FAQ page here.
