Perpetual Funding System
Unlike dated futures, perps don’t have an expiry. In place of that, users are charged a funding rate based on their position and the orderbook on Zeta.
How does Zeta calculate funding rates?
Over 24 hours, longs pay shorts based on the following formula:
is the midpoint of the orderbook given $1000 worth of quotes on both the bid and ask side.
For example, let’s say you are long 100 lots of SOL-PERP and hold it for 24 hours. Over that time, the orderbook midpoint is $11.76 and the SOL oracle price is $12 (in reality these will fluctuate).
A negative funding rate means that shorts pay longs. Therefore your long position will be paid $24 per day as funding is negative.
How is funding paid on Zeta?
Funding rates on Zeta are calculated on Zeta approximately every 10 seconds.
Rather than applying funding on a set timer, we apply it to your balance on any balance-sensitive operation (placeOrder, withdraw, liquidate, etc.), as well as every couple of minutes using our cranks.
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