Funding Mechanism

Funding Mechanism is necessary to keep the perpetual contracts’ prices in the
adequate range of deviations from the Indices they represent. Since the perpetual
contracts are in fact futures that never settle, traditional mechanisms for linking
instrument prices to assets do not work.

The Funding Rate applied for a position in a specific instrument is a function of the
deviation from the underlying Index calculated for a particular instrument. Funding on
ZUBR occurs every five (5) minutes.

When the Funding Rate is positive, clients holding long positions pay the clients holding
short positions and vice versa - when the rate is negative, clients holding short positions
pay the clients holding long positions. ZUBR does not charge any fees on these
payments.

The Funding Rate is designed to make the cost of holding a position that deviates from
the Index within an interval of 24 hours equal to the size of the deviation.
The client will only pay or receive funding if he or she holds an open position at the
moment of the cut-off (end of each funding period).

For example, if the current instrument price deviation from the Index is 1%, the funding
rate for a 5-minute interval will be 1 / 24 / 12 = 0.0035%. If the deviation from the Index
remains unchanged for 24 hours, the traders holding one-sided positions will obtain a
profit of 1%, while the others will suffer the same loss.

The funding amount is calculated as per the formula below:

Where FundingCoef = 1 / 24 / 12 ~ 0.003472, and Pos is your BTC position in a
given instrument.

Price market is the Market Price calculated as an average value of the middle price of
the spread over a five-minute period.

Price mark is the Mark Price calculated as the average Mark Price over a five-minute
period.

Pos is position size irrespective of the leverage in a given instrument at the moment of
the cut-off.

ZUBR imposes maximum and minimum caps on the Funding Rate. The caps can be
found in the Contracts Specification section.