Funding Mechanism

It 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 are never settled, traditional mechanisms for linking instrument prices to the 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, the clients holding long positions pay the clients holding short positions and vice versa. When the Rate is negative, the clients holding short positions pay the clients holding long positions. ZUBR does not charge any fees for 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 (the end of each funding period).

For example, if the current instrument price deviation value from the Index is 1%, the funding rate for a 5-minute interval will be 1 / 24 / 12 = 0.0035%. If the deviation value remains unchanged for 24 hours, the traders holding one-sided positions will obtain a profit of 1%, while 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 where the spread is taken over a five-minute period.

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

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

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