Funding Rate

The funding rate is the key to maintaining the perpetual contract price in balance with the spot price. The underlying principle is when the contract price is higher than the index price, long position holders compensate short position holders; conversely, when the contract price is lower than the index price, short position holders compensate long position holders.

In the BRMM model: when the LPs hold short positions, long position holders compensate short position holders; conversely, when the LPs hold long positions, short position holders compensate long position holders.

The Funding Rate is calculated and collected/paid in real-time.

Protocol Funding Fees

Protocol funding fees are expenses that must be paid jointly by both long and short positions, and they serve as the source of income for the protocol. The current rate is 0.002% per hour.

Protocol Funding Fee Distribution:

1. 50% is distributed to Liquidity Providers.

2. 25% is allocated to EQU Staking.

3. 25% goes to EFC Architects.