When the funding rate is positive, long position holders pay funding to the short position holders; when the funding rate is negative, short position holders pay funding to the long position holders. To aid readability the funding rate is expressed as an 8-hour interest rate, however funding is actually calculated and paid/received continuously and can be seen in real time in the realised session profit (RSPL).
Deribit does not charge any fees on funding. All the funding payments are transferred between the holders of the perpetual contracts. This makes the funding a zero-sum game, where longs receive all funding from shorts, or shorts receive all funding from longs.
The calculation begins by calculating the Premium Rate.
Premium Rate = ((Mark Price - Deribit Index) / Deribit Index) * 100%
Next, the Funding Rate is calculated from the premium rate by applying a damper and a cap.
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If the premium rate is within -0.025% and 0.025% range, the actual funding rate will be reduced to 0.00%.
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If the premium rate is lower than -0.025%, then the actual funding rate will be the premium rate + 0.025%.
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If the premium rate is higher than 0.025%, then the actual funding rate will be the premium rate - 0.025%.
The uncapped funding rate can be calculated as:
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Uncapped Funding Rate = Maximum (0.025%, Premium Rate) + Minimum (-0.025%, Premium Rate)
The funding cap can vary by instrument, and is applied as follows:
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Minimum (Maximum_Cap, Maximum (Minimum_Cap, Uncapped Funding Rate))
Putting the two together, the Funding Rate is therefore given by:
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Funding Rate = Minimum (Maximum_Cap, Maximum (Minimum_Cap, (Maximum (0.025%, Premium Rate) + Minimum (-0.025%, Premium Rate))))
Time Fraction = Funding Rate Time Period / 8 hours
The actual funding payment is calculated by multiplying the funding rate by the position size and the time fraction.
Funding Payment = Funding Rate * Position Size * Time Fraction
In reality the spread of the Deribit Index and the mark price changes continuously, and all changes are taken into account. Therefore, the examples below are extreme simplifications of the actual calculations. The funding paid or received is continuously added to the realized sessions PNL (RSPL) and is moved to or from the cash balance at the daily settlement, at 08:00 UTC.
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BTC |
ETH |
USDC & USDT |
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Funding damper |
Minimum -0.025% and maximum 0.025% |
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Funding cap |
Minimum -0.5% and maximum 0.5% |
Minimum -1.0% and maximum 1.0% |
Minimum -5.0% and maximum 5.0% |
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Example 1 |
If the BTC-PERPETUAL mark price is at USD 100,075 and the Deribit index is at USD 100,000, the funding rate and premium rate are calculated as follows: Premium Rate = ((100,075 - 100,000) / 100,000) * 100% = 0.075% Uncapped Funding Rate = Maximum (0.025%, 0.075%) + Minimum (-0.025%, 0.075%) = 0.075% - 0.025% = 0.05% Let's assume a trader has a long position of USD 100,000 (1 BTC) for 1 minute, and during this minute the mark price remains at USD 100,075 and the Deribit index remains at USD 100,000, in this case, the funding calculation for this period is: 8 hours = 480 minutes: Time Fraction = 1/480 Funding Payment = 0.05% * 1 BTC * 1/480 = 0.000001041667 BTC The short position holders receive this amount and the long position holders pay it. |
If the ETH-PERPETUAL mark price is at USD 5,005 and the Deribit index is at USD 5,000, the funding rate and premium rate are calculated as follows: Premium Rate = ((5,005 - 5,000 / 5,000) * 100% = 0.10% Uncapped Funding Rate = Maximum (0.025%, 0.10%) + Minimum (-0.025%, 0.10%) = 0.10% - 0.025% = 0.075% Let's assume a trader has a long position of USD 5,000 (1 ETH) for 1 minute, and during this minute the mark price remains at USD 5,005 and the Deribit index remains at USD 5,000, in this case, the funding calculation for this period is: 8 hours = 480 minutes: Time Fraction = 1/480 Funding Payment = 0.075% * 1 ETH * 1/480 = 0.0000015625 ETH The short position holders receive this amount and the long position holders pay it. |
If the SOL_USDC-PERPETUAL mark price is at USDC 100.10 and the Deribit index is at USDC 100, the funding rate and premium rate are calculated as follows: Premium Rate = ((100.10 - 100) / 100) * 100% = 0.1% Uncapped Funding Rate = Maximum (0.025%, 0.1%) + Minimum (-0.025%, 0.1%) = 0.1% - 0.025% = 0.075% Let's assume a trader has a long position of USDC 100,000 (1,000 SOL) for 1 minute, and during this minute the mark price remains at USDC 100.10 and the Deribit index remains at USDC 100, in this case, the funding calculation for this period is: 8 hours = 480 minutes: Time Fraction = 1/480 Funding Payment = 0.075% * 100,000 * 1/480 = 0.15625 USDC The short position holders receive this amount and the long position holders pay it. |
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Example 2 |
If a trader chose to hold the position of the previous example for 8 hours and the mark price and Deribit index remained at USD 100,075 and USD 100,000 for the entire period, then the funding rate would be 0.05%. The funding payment would be paid by the longs and received by the shorts. For 8 hours, it would have been 0.0005 BTC. |
If a trader chose to hold the position of the previous example for 8 hours and the mark price and Deribit index remained at USD 5,005 and USD 5,000 for the entire period, then the funding rate would be 0.075%. The funding payment would be paid by the longs and received by the shorts. For 8 hours, it would have been 0.00075 ETH. |
If a trader chose to hold the position of the previous example for 8 hours and the mark price and Deribit index remained at USDC 100.10 and USDC 100 for the entire period, then the funding rate would be 0.075%. The funding payment would be paid by the longs and received by the shorts. For 8 hours, it would have been 75 USDC. |
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Example 3 |
If the mark price is USD 100,075 for 1 minute and then changes to USD 99,925 the minute after that, however, the Index remains at USD 100,000, then the net funding in these 2 minutes for a 1 BTC long position is exactly 0 BTC. After the first minute, the trader would pay: 0.05% * 1BTC * 1/480 = 0.000001041667 BTC, however, the minute after, the trader would receive exactly the same amount. |
If the mark price is USD 5,005 for 1 minute and then changes to USD 4,995 the minute after that, however, the Index remains at USD 10,000, then the net funding in these 2 minutes for a 1 BTC long position is exactly 0 BTC. After the first minute, the trader would pay: 0.075% * 1 ETH * 1/480 = 0.0000015625 ETH, however, the minute after, the trader would receive exactly the same amount. |
If the mark price is USDC 100.10 for 1 minute and then changes to USDC 99.90 the minute after that, however, the Index remains at USDC 100, then the net funding in these 2 minutes for a 100,000 USDC long position is exactly 0 USDC. After the first minute, the trader would pay: 0.075% * Position Size * 1/480 = 0.15625 USDC, however, the minute after, the trader would receive exactly the same amount. |
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Example 4 |
The mark price is USD 100,020, and the Index remains at USD 100,000. In this case, real-time funding is zero (0.00%) because the mark price is within the +/-0.025% range from the index price(within USD 99,975 and USD 100,025). This can be checked by using the premium rate and funding rate formulas: Premium Rate = ((100,020 - 100,000) / 100,000) * 100% = 0.02% Uncapped Funding Rate = Maximum (0.025%, Premium Rate) + Minimum (-0.025%, Premium Rate) = 0.025% - 0.025% = 0.00% |
The mark price is USD 5,001, and the Index remains at USD 5,000. In this case, real-time funding is zero (0.00%) because the mark price is within the +/-0.025% range from the index price(within USD 4,998.75 and USD 5,001.25). This can be checked by using the premium rate and funding rate formulas: Premium Rate = ((5,001 - 5,000) / 5,000) * 100% = 0.02% Uncapped Funding Rate = Maximum (0.025%, Premium Rate) + Minimum (-0.025%, Premium Rate) = 0.025% - 0.025% = 0.00% |
The mark price is USDC 100.02, and the Index remains at USDC 100. In this case, real-time funding is zero (0.00%) because the mark price is within the +/-0.025% range from the index price (within USDC 99.975 and USDC 100.025). This can be checked by using the premium rate and funding rate formulas: Premium Rate = ((100.02 - 100) / 100) * 100% = 0.02% Uncapped Funding Rate = Maximum (0.025%, Premium Rate) + Minimum (-0.025%, Premium Rate) = 0.025% - 0.025% = 0.00% |
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Example 5 |
To explain the funding cap we need to take an extreme example If the mark price is at USD 107,500 and the index price is at 100,000, the funding rate and premium rate are calculated as follows: Premium Rate = ((107,500 - 100,000) / 100,000) * 100% = 7.5% Uncapped Funding Rate = Maximum (0.025%, 7.5%) + Minimum (-0.025%, 7.5%) = 7.5% - 0.025% = 7.475% This exceeds the funding cap, and so the final funding rate would be calculated as follows: Funding Rate = Minimum (0.5%, Maximum (-0.5%, (Maximum (0.025%, 7.5%) + Minimum (-0.025%, 7.5%)))) = 0.5% |
To explain the funding cap we need to take an extreme example If the mark price is at USD 5,100 and the index price is at 5,000 the funding rate and premium rate are calculated as follows: Premium Rate = ((5,100 - 5,000 / 5,000) * 100% = 2.0% Uncapped Funding Rate = Maximum (0.025%, 2.0%) + Minimum (-0.025%, 2.0%) = 2.0% - 0.025% = 1.975% This exceeds the funding cap, and so the final funding rate would be calculated as follows: Funding Rate = Minimum (1.0%, Maximum (-1.0%, (Maximum (0.025%, 7.5%) + Minimum (-0.025%, 7.5%)))) = 1.0% |
To explain the funding cap we need to take an extreme example If the mark price is at USDC 107.50 and the index price is at 100, the funding rate and premium rate are calculated as follows: Premium Rate = ((107.50 - 100) / 100) * 100% = 7.5% Uncapped Funding Rate = Maximum (0.025%, 7.5%) + Minimum (-0.025%, 7.5%) = 7.5% - 0.025% = 7.475% This exceeds the funding cap, and so the final funding rate would be calculated as follows: Funding Rate = Minimum (5.0%, Maximum (-5.0%, (Maximum (0.025%, 7.5%) + Minimum (-0.025%, 7.5%)))) = 5.0% |