Skip to main content
Funding is an hourly exchange of value between traders holding long positions and traders holding short positions. Its purpose is to keep the Mark Price anchored close to the Index Price. Without funding, perpetual contracts could trade at a persistent premium or discount to the broader market.

​
How Funding Works

The direction of the funding payment depends on the sign of the funding rate:
  • Positive funding rate — longs pay shorts. This happens when the Mark Price is above the Index Price, making long exposure more expensive and short exposure more attractive.
  • Negative funding rate — shorts pay longs. This happens when the Mark Price is below the Index Price, making short exposure more expensive and long exposure more attractive.

​
Funding Rate Calculation

The funding rate is calculated in four steps every hour.

​
Step 1: Calculate the Premium

The premium is the relative gap between the Mark Price and the Index Price, expressed as a decimal. For example, 0.01 equals 1%.

​
Step 2: Cap with the Dampener

This formula clamps the base funding rate to the interval [-dampener, +dampener], preventing extreme funding rates from amplifying market dislocations. The dampener value differs by product:
These dampener values can change. Check the Markets API for the current value for each trading pair.

​
Step 3: Scale to the Hourly Interval

On Everstrike:
  • Funding Period = 10 hours
  • Funding Interval = 1 hour
Each hourly funding exchange therefore applies one tenth of the capped 10-hour base rate. For perpetual futures, this caps the hourly funding rate at 0.3% (3% ÷ 10).

​
Step 4: Calculate the Funding Payment

The payment for each direction is:
Position Size (USD) is the position’s notional value in USD.

​
Example

Suppose a perpetual futures contract has the following values: Step 1 — Premium:
Step 2 — Cap with dampener:
Step 3 — Scale to hourly interval:
Step 4 — Calculate payment:
Because the funding rate is positive, the long pays 10 USD and the short receives 10 USD.

​
Operational Details

Everstrike exchanges funding during the first five seconds of each hour. During this window, Everstrike snapshots all open positions and debits or credits each trader’s margin balance accordingly.
Trading is disabled during the first ten seconds of each hour to allow the funding exchange to complete cleanly. Do not submit orders immediately on the hour.