What is Funding Fee?
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Funding fees are used in SAFEX perpetual contracts to anchor the market price of the contracts to the spot price of the asset.
The funding fee collection period varies depending on the currency pair, with common intervals being 8 hours and 4 hours. For example, fees are collected around 08:00, 16:00, and 24:00 (HKT) each day. To ensure fairness in trading and market balance, the actual calculation time occurs around these fixed points. SAFEX settles funding fees for positions held at these times to reflect the differential in market funding costs and adjust the market leverage impact. The calculation of the funding rate is fully automated, ensuring transparency and efficiency in trading. Funding fees are only due if a position is held at these times. If positions are closed before the fee collection, no funding fee is payable. If a contract is taken offline before settlement, no funding fee for that period is due.
Theoretical Funding Fee
Funding Fee = Position Value x Current Funding Rate. When the funding rate is positive, long positions pay short positions; when negative, short positions pay longs.
Funding Rate = Clamp(MA(((Best Bid + Best Ask) / 2 - Spot Index Price) / Spot Index Price - Interest), a, b)
Interest is currently 0.
The parameters a and b for various currencies are as follows:
BTC (USDT/USD)
-0.38%
0.38%
ADA, AVAX, BCH, DOT, EOS, ETC, ETH, FIL, LINK, LTC, TRX, XRP, BTC (USDC)
-0.75%
0.75%
DOGE (USD)
-3%
3%
Other Currencies
-1.50%
1.50%
[Please note that these figures and indicators may be adjusted in real time based on market conditions without prior notice.]
Actual Funding Fee
In Cross Margin mode: At the time of funding fee collection, the fee is deducted directly from the available margin in the user’s cross margin account. If the available margin is insufficient, all orders that increase margin usage are canceled, including all spot and margin orders for that currency, up to the amount of maintenance margin + liquidation fees. No further fees are collected beyond this point.
In Isolated Margin mode: The funding fee is first deducted from the transferable balance of the user’s cross margin account. The transferable balance in cross margin mode may include borrowed funds. If this balance is insufficient, isolated margin orders for that contract are canceled, and excess amounts are deducted from the fixed margin of the user's isolated positions, up to the amount of maintenance margin + liquidation fees. No further fees are collected beyond this point.
The actual funding fees collected also depend on the total amount deducted from the counterparty's account.
SAFEX does not collect any funding fees; they are collected among users.
Collection Order
In accounts with a single-currency USDT balance and cross-currency total margin accounts, if a user holds multiple perpetual contract positions subject to funding fees, the fees are collected in a certain currency order until the user's margin equals the maintenance margin + liquidation fees, with no further collection beyond this point.
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