Funding Rate

When the Funding Rate is positive, traders holding long positions will pay traders with short positions a funding fee. Conversely, if the funding rate is negative, the traders holding short positions will pay the funding fee to the traders with long positions.

At the "Contract Details" section, traders can check the funding rate which has been fixed for upcoming funding timestamp (within 8 hours). When traders hover the cursor on top of the Funding rate, the Predicted Funding Rate will be displayed and it illustrates the predicted funding rate for the subsequent funding timestamp (within 16 hours). It is not fixed and is updated every minute according to Interest Rate and Premium Index that affects the calculation of the funding rate until the end of the current funding interval.

Funding Rate Equation

$$ \textsf{Funding Rate(F)} = {\textsf{Premium Index(P)}+\textsf{clamp(Interest(I) - Premium Index(P), 0.05%, -0.05%)}} $$

MCS calculates the Premium Index(P) and Interest Rate(I) every minute and then performs an 8-Hour Time-Weighted-Average-Price (TWAP) over the series of minute rates. The Funding Rate is next calculated with the 8-Hour Interest Rate Component and the 8-Hour Premium / Discount Component. A +/-0.05% dampener is added.

Traders can use the above equation to check the funding fee payable or receivable at the time of the upcoming funding fee settlement.

Funding Rate Limit

\begin{align}&\small\textsf{Funding Rate}\leq\textsf{(Base Initial Margin} - \textsf{Base Maintenance Margin)}\times\textsf{75%}\\&\small\textsf{Funding Rate}\geq\textsf{(Base Initial Margin} - \textsf{Base Maintenance Margin)}\times\textsf{75%}\end{align}