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The instantaneous funding rate is calculated as follows. First, we take the impact notional amount (INA), a per-market constant:
Formula
Next, we determine the impact ask price (IAP) and impact bid price (IBP). These are defined as the average execution price for a market sell (buy) of the impact notional amount respectively. We use these values to calculate the perpetual premium:
Formula
Where:
  • IBP is the impact bid price.
  • Spot is the spot price of the underlying base asset.
  • IAP is the impact ask price.
Finally, we calculate the funding rate per hour as:
Formula
Where:
  • UnderlyingRate= 0.00125% (equivalently, 0.01% per 8 hours) and
  • perpConvergence = 8
The funding paid from longs to shorts is then calculated as follows:
Formula
Where:
  • Perp Size is the number of perpetual contracts (this number is negative for shorts).
  • Time Held is the duration the position is open for in hours.
The perpetual funding rates are capped at
  • PERP_MAX_FUNDING = 0.057% per hour for ETH/BTC and 0.4% for all others
  • PERP_MIN_FUNDING = -0.057% per hour for ETH/BTC and 0.4% for all others
In other words, the maximum rate longs can pay shorts will be 0.057% of the spot price per hour. Similarly, the maximum rate shorts can pay longs will be 0.057% per hour (represented as -0.057%).
📘 The funding rate quoted above and returned by the API is a per-hour rate, not a per-8-hour rate.