The mechanism of Funding ensures the price of Perpetual Swap on DueDEX to track the underlying Index Price closely. Periodic payments exchanged between the buyer and seller every 8 hours. If the rate is positive, the long position holders will pay the short position holders payment, and vice versa if the rate is negative.
You will only pay or receive the funding if you hold a position at that Funding Timestamp. If you close your position before Funding Timestamp, you don’t have to pay/receive funding payment.
Funding Timestamp: 04:00 UTC, 12:00 UTC and 20:00 UTC every day.
The funding you pay or receive is calculated as:
- Funding = Position Value * Funding Rate
For example, if you hold BTCUSD contracts with value of 10BTC (notional value), Funding rate =0.05%, then Funding is 10BTC* 0.05%= 0.005BTC
If the rate is positive, the long position holders will need to pay the short position holders, and vice versa if the rate is negative.