Funding & Insurance

Overview of how funding rates keep perpetual prices aligned and how the Insurance Fund covers shortfalls.

Funding rate and funding payments

The periodic payment exchanged between long and short position holders occurs every 8 hours by default, but may vary by instrument (see _our contracts offering & specs _for specifics of each contract). Funding keeps the perpetual’s price tethered to the underlying’s index price. If the perpetual is trading above the index (premium), longs pay shorts; if below (discount), shorts pay longs. Traders only pay or receive funding if they hold a position at the funding timestamp.

Insurance Fund

A reserve pool (denominated in BTC) maintained by the exchange to cover losses when liquidations occur below the bankruptcy price (i.e. trader losses exceed their collateral) and to address certain operational or systemic risk events at the Company’s discretion. It is built up by contributions from the exchange and from profitable liquidation events, and may also receive allocations or adjustments made by the Company as part of its broader risk management (see Insurance Fund for detailed information about how our insurance fund works).