From 08:00 on November 7, 2023, ONUS Pro will officially implement the Funding Rate mechanism for all trading pairs, except for the 3 pairs ONSVNDC, ONUSVNDC, and MNAIVNDC.
About the Funding mechanism
- What Is Funding?
A key feature of traditional futures contracts is the expiration date. When a contract expires, a process known as settlement begins. However, ONUS currently employs perpetual futures contracts, allowing traders to maintain their positions indefinitely (without expiration). This leads to price disparities between the Futures market and the Spot market.
As a result, the Funding mechanism was introduced as a means of preventing excessive price disparities between these two markets and ensuring traders’ benefits.
When the Funding Rate is positive, the price of the perpetual contract is usually higher than the mark price. Thus, traders who are long pay for short positions. Conversely, a negative Funding Rate means that short positions pay for longs.
Depending on the positions they hold at the time of Funding settlement, traders will either pay or receive Funding fees.
- The Process of Funding Fee Settlement at ONUS Pro
The Funding fee settlement timing at ONUS Pro will apply to each trading pair individually. For detailed information, please refer to: https://pro.goonus.io/en/information.
- At the Funding time, depending on the actual Funding Rate, traders with open positions will settle the Funding fees with each other. Funding Rates are paid peer-to-peer. Therefore, ONUS takes no fees from Funding Rates as they happen directly between users.
- If positions are fully closed before the settlement time, traders will not have to make or receive Funding fee payments.
Funding fees will be applied to each individual position separately. A trader who has multiple positions may simultaneously receive/pay Funding fees for different contracts.
- If a trader has an open position and is entitled to receive the Funding Rate, the Funding fee will be added directly to the trader’s available balance.
- If a trader with an open position is required to pay the Funding Rate, the Funding fee will be deducted directly from the trader’s available balance. If the balance is insufficient, the deficit will be deducted from the position’s margin. Traders should exercise careful calculation to avoid unexpected liquidations.
Traders will receive Funding fees based on their trading volume and the actual Funding Rate. The larger the trading volume, the higher the payment traders will receive. Conversely, if required to pay Funding fees, a larger trading volume will result in higher fees.
- Formula for Calculating Funding Fees for Traders
Funding Fee = Order Size * Funding Rate
Order Size = Mark Price * Volume * Funding Rate
Alternatively:
Funding Fee = Margin * Leverage * Funding Rate
Notes
- A higher Funding rate indicates a greater potential for price volatility at the Funding settlement time.
- The Funding rate frequently changes and fluctuates, sometimes experiencing significant increases or decreases without fully reflecting market sentiment.
- In the event of extreme market volatility, ONUS reserves the right to update the Funding rate limits and timeframes for each trading pair.
- Within 1 minute after the Funding fee settlement time, if you open a new position, you may incur a Funding fee.
