What is Funding Fee?

Funding Fees in EasiCoin Perpetual Contracts

Funding fees in EasiCoin perpetual contracts are used to anchor the market price of the contracts to the spot price of the underlying asset.

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Funding Fee Collection Period

The funding fee collection period can vary depending on the currency pair, with common intervals being 8 hours and 4 hours. For instance, fees are collected around the following times (HKT) each day:

• 08:00

• 16:00

• 24:00

To ensure fairness in trading and market balance, the actual calculation of funding fees occurs around these fixed points. EasiCoin settles funding fees for positions held at these times, reflecting the differential in market funding costs and adjusting the market leverage impact. The calculation of the funding rate is fully automated, ensuring transparency and efficiency.

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When Are Funding Fees Due?

Funding fees are only due if a position is held at the time of collection. If positions are closed before the fee collection period, no funding fee is payable. Similarly, if a contract is taken offline before settlement, no funding fee is due for that period.

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Theoretical Funding Fee

The funding fee is calculated using the following formula:

Funding Fee = Position Value x Current Funding Rate

• When the funding rate is positive: Long positions pay short positions.

• When the funding rate is negative: Short positions pay long positions.

Funding Rate Formula: Funding Rate = Clamp(MA(((Best Bid + Best Ask) / 2 - Spot Index Price) / Spot Index Price - Interest), a, b)

• Interest is currently set to 0.

• Parameters a and b vary by currency pair and are subject to change in real time based on market conditions.

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Actual Funding Fee

• In Cross Margin Mode: At the time of funding fee collection, the fee is deducted directly from the available margin in the user's cross margin account. If the available margin is insufficient, all orders that increase margin usage are canceled, including all spot and margin orders for that currency, up to the amount of the maintenance margin plus liquidation fees. No further fees are collected beyond this point.

• In Isolated Margin Mode: The funding fee is first deducted from the transferable balance in the user's cross margin account. This balance may include borrowed funds. If this balance is insufficient, isolated margin orders for that contract are canceled, and excess amounts are deducted from the fixed margin of the user's isolated positions, up to the amount of maintenance margin plus liquidation fees. No further fees are collected beyond this point.

The actual funding fees collected also depend on the total amount deducted from the counterparty's account.

Note: EasiCoin does not collect any funding fees; they are collected among users.

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Collection Order

In accounts with a single-currency USDT balance and cross-currency total margin accounts, if a user holds multiple perpetual contract positions subject to funding fees, the fees are collected in a specific currency order. Fees will continue to be deducted until the user's margin equals the maintenance margin plus liquidation fees, with no further collection beyond this point.

EasiCoin Team