BTSE implemented the Funding Fee mechanism to facilitate market fairness and keep the perpetual futures market price close to the average market price (index price).

When there is a difference between BTSE's perpetual futures market price and the index price, the system will charge funding fees from those who gained profit due to the market price deviation at every 8-hour settlement, then credit the funding fees to those who lost profit due to the market price deviation.

For example:

When the latest market price is much lower than the index price (which will obviously benefit to the Shorts), traders in Short will be charged for the funding fees, and those in Long will receive the funding fees. On the contrary, if the market price is much higher than the index price, Longs will be charged, and Shorts will receive.

Funding Fees Settlement Time and Frequency

3 times per day, UTC 08:00, 16:00, 24:00

Funding Fees Settlement Conditions

Funding fees will only be charged / paid when both of the following conditions are met:

  1. Funding rate is not equal to 0% (if funding rate = 0, no funding fees will be charged / paid)
  2. The status of your position must be Open during the system’s funding fees settlement (if the position is closed prior to the funding fees settlement, no funding fees will be charged / paid)

Funding Fees Calculation

Funding Fee = Notional Value x Funding Rate

  • Funding Rates will be updated every minute. When settling the fee, the system will use every minutes' average results in the past 8 hours to calculate the fee.
  • Notional Value = Mark Price x Position Size x Contract Multiplier
  • Funding Rate = [Max (0, Impact Bid-Perp Index) - Max (0, Perp Index-Impact Ask)] / Perp Index / 3
    • When the funding rate is positive, Longs pay Shorts; when the funding rate is negative, Shorts pay Longs
    • Impact Bid Price: The average buy price of the first 10,000 highest bid orders in the Order Book
    • Impact Ask Price: The average sell price of the first 10,000 lowest ask orders in the Order Book

For example:

BTC Perpetual

- Index Price: 1230 USD

- Mark Price: 1250 USD

- Impact Bid: 1300 USD

- Impact Ask: 1299 USD

- Position Size: 1000 contracts

- Contract Multiplier: 0.001

Notional Value = 1250 x 1000 x 0.001 = 1250

Funding Rate = [Max (0 , 1300-1230) - Max (0, 1230-1299)] / 1230 / 3 = (70-0) / 1230 / 3 = 0.0189

Funding Fee = 1250 * 0.0189 = 23.625 USD (Long pays to Short)