Funding Rate Mechanism

1.What Is the Funding Rate?

The Funding Rate is a periodic payment exchanged between traders holding long and short positions in perpetual futures contracts. Its purpose is to keep the perpetual contract price closely aligned with the spot market price and prevent significant price deviations. When the perpetual contract price diverges from the spot price, funding payments between long and short position holders incentivize traders to take positions that bring the contract price back toward the spot price.

Bullish Market (Contract Price > Spot Price) The Funding Rate is positive. Long position holders pay funding fees, and short position holders receive funding fees.

Bearish Market (Contract Price < Spot Price) The Funding Rate is negative. Short position holders pay funding fees, and long position holders receive funding fees.

 

Websea Funding Fee Rules

Funding fees are exchanged directly between users holding long and short positions. The platform does not charge any fees for funding payments.

Funding fees apply only to users who hold positions at the funding timestamp.

Users without open positions will neither pay nor receive funding fees.

2.Funding Settlement Schedule

Funding Interval: Funding payments occur three times per day.

Funding Timestamps (UTC): 16:00 (previous day), 00:00, 08:00

Some trading pairs may use different funding intervals. Please refer to the information displayed on the trading page.

3.Funding Rate Calculation

Funding Rate (Premium Index)

Funding Rate Formula

Funding Rate = clamp [Average Premium Index + clamp (Interest Rate – Average Premium Index, 0.05%, -0.05%), Upper Limit, Lower Limit]

• Interest Rate = 0.03% / (24 / Funding Interval)
  • Example: For the BTCUSDT perpetual contract, funding occurs every 8 hours, therefore: Interest Rate = 0.01%
• The upper and lower limits of the funding rate vary depending on the trading pair. Please refer to the contract specifications on the trading page.
• Premium Index = [max(0, Depth-Weighted Bid Price − Index Price) − max(0, Index Price − Depth-Weighted Ask Price)] / Index Price
• The Average Premium Index is calculated using a time-weighted average of Premium Index values within the current funding interval.
  • Example: Average Premium Index at time Tn = (1 × Premium Index at T1 + 2 × Premium Index at T2 + ... + n × Premium Index at Tn) / (1 + 2 + ... + n). If a contract has an 8-hour funding interval, the funding rate calculated at 14:59 will use the Premium Index recorded every minute between 07:00 and 14:59, where: n = 480
• The Depth-Weighted Bid (or Ask) Price represents the average execution price required to fill a predefined notional amount in the order book.
  • Depth-Weighted Bid (Ask) Price = Depth-Weighted Notional / Quantity Required to Reach the Depth-Weighted Notional
    • Depth-Weighted Notional = 200 × Maximum Leverage of the Contract
• The funding rate is calculated every minute, and the most recently calculated value is used at the funding timestamp.
  • For the 16:00 funding settlement, the system uses the funding rate calculated at 15:59.
  • In practice, the settlement process may take up to one minute. For example, if a trader opens a position at 16:00:20 (UTC) and the settlement has not yet completed, the trader may still pay or receive funding fees.

Example: BTCUSDT Depth-Weighted Bid Price

Assuming the maximum leverage is 100×: Depth-Weighted Notional = 200 × 100 = 20,000 USDT

Bid Level	Price (USDT)	Quantity (BTC)	Calculation
1	70000	0.03	Order value at Bid 1 = 70,000 × 0.03 = 2,100 USDT The entire quantity at this level is included in the depth-weighted bid price calculation: 0.03 BTC
2	69900	0.04	Cumulative order value up to Bid 2 = Value at Bid 2 + Value at Bid 1 = 69,900 × 0.04 + 2,100 = 4,896 USDT The entire quantity at this level is included in the depth-weighted bid price calculation: 0.04 BTC
3	69800	0.5	Cumulative order value up to Bid 3 = Value at Bid 3 + Value at Bid 1 and Bid 2 = 69,800 × 0.5 + 4,896 = 39,796 USDT Remaining notional required to reach the depth-weighted notional = 20,000 − 4,896 = 15,104 USDT Required quantity at this level = 15,104 / 69,800 = 0.21638 BTC
Therefore, Depth-Weighted Bid Price = 20,000 / (0.03 + 0.04 + 0.21638) = 69,837.2 USDT

Example: BTCUSDT Depth-Weighted Ask Price

Assuming the maximum leverage is 100×: Depth-Weighted Notional = 200 × 100 = 20,000 USDT

Ask Level	Price (USDT)	Quantity (BTC)	Calculation Process
1	70000	0.03	Order value at Ask 1 = 70,000 × 0.03 = 2,100 USDT The entire quantity at this level is included in the depth-weighted ask price calculation: 0.03 BTC
2	70100	0.04	Cumulative order value up to Ask 2 = Value at Ask 2 + Value at Ask 1 = 70,100 × 0.04 + 2,100 = 4,904 USDT The entire quantity at this level is included in the depth-weighted ask price calculation: 0.04 BTC
3	70200	0.5	Cumulative order value up to Ask 3 = Value at Ask 3 + Value at Ask 1 and Ask 2 = 70,200 × 0.5 + 4,904 = 40,004 USDT Remaining notional required to reach the depth-weighted notional = 20,000 − 4,904 = 15,096 USDT Required quantity at this level = 15,096 / 70,200 = 0.21504 BTC
Therefore, Depth-Weighted Ask Price = 20000 / (0.03 + 0.04 + 0.21504) = 70165.5 USDT

4.Funding Fee Settlement

Platform Collects Funding Fees

The platform collects the funding fees in full. After a funding fee is deducted, the user’s position may be subject to liquidation if the remaining margin falls below the maintenance requirement.   Isolated Margin Mode Funding fees are deducted directly from the margin of the isolated position. No open orders will be canceled during the deduction process.   Cross Margin Mode Funding fees are deducted from the Cross Margin account balance. No open orders will be canceled during the deduction process.

Platform Distributes Funding Fees

Based on the total funding fees collected during the current funding interval, the platform distributes the full amount to eligible users pro-rata according to their position size.   Isolated Margin Mode Funding fees are credited to the margin of the isolated position.   Cross Margin Mode Funding fees are credited to the Cross Margin account.