Funding Payments

Overview

Funding payments are recurring fees exchanged between counterparties of the perpetual contract (from long positions to short positions and vice versa), ensuring the perpetual's price remains aligned with the underlying spot price of the asset. In practice:

• If the perpetual price exceeds the spot price, long positions pay funding fees to short positions.

• If the perpetual price is lower than the spot price, short positions pay funding fees to long positions.

The size of the funding payment is determined by the difference between the perpetual and spot prices, as well as the duration over which this difference is realized.

Funding Payments on X10

At X10, funding payments are charged every hour and are applied to all users with open positions at that time. If a user closes their position before the funding fee is charged, it is not applied.

Funding Payment = Position Size * Mark Price * (-Funding Rate), which implies that:

• If the funding rate is positive, long positions pay to short positions.

• If the funding rate is negative, short positions pay to long positions.

Funding Rate = Clamp (Average Premium / 8, - Rate Cap, Rate Cap), which implies that:

• Although Funding Payment is charged hourly, Average Premium is realised over 8 hours.

• The size of the Funding Rate is capped as per the table below.

Average Premium = (1*Premium Index_1 + ··· + N*Premium Index_N) / (1+···+N), where:

• Premium Index is calculated every minute and therefore ‘N’ is equal to 60.

• Premium Index = (Max(0, Impact Bid - Index Price) - Max(0, Index Price - Impact Ask)) / Index Price.

• Impact Bid / Ask refers to the average fill price to execute the Impact Notional on the Bid / Ask side.

• Impact Notional for different groups of markets is described below.

Funding Rate Caps and Impact Notional Values across groups of markets.

Group*	Rate Cap per hour	Impact Notional
1	1%	$10,000
2	2%	$5,000
3	3%	$2,500
4	3%	$2,500
5	3%	$2,500

*Refer to the section Margin Schedule for grouping of markets.