1. What is the funding rate?
The funding rate is a periodic fee paid to long or short traders based on the spread between the market price of a perpetual contract and the spot price. When the market trend is bullish, the funding rate is positive and will increase over time. In this case, the long trader of the perpetual contract will pay a capital fee to the other trader. Conversely, when the market is bearish, the funding rate is negative and it is the short trader of the perpetual contract who pays the long trader.

2. Why are funding rates so important?
The main purpose of the funding rate is to reduce the spread between the perpetual contract and the underlying asset.
The difference between perpetual contracts and traditional futures is that they have no expiration date. Therefore, a trader can hold a position forever, unless he is forced to close it. Therefore, trading in perpetual contracts is very similar to trading in spot pairs.
Therefore, cryptocurrency exchanges have created a mechanism to ensure that the price of perpetual contracts will correspond to the index. This is known as the funding rate.

3. How is YIBI's funding rate calculated?
The funding rate is calculated using the following formula.
Funding amount = Notional value of position x Funding rate
(Notional Value of Position = Markup x Number of Contracts Held)

Please note that YIBI does not charge any commission from the funding rate and the funds are transferred directly between users.

All perpetual contracts of YIBI contracts are preset to be funded every 8 hours, at 00:00 UTC, 08:00 UTC, 16:00 UTC. In the event of extreme market volatility, YIBI reserves the right to update the funding interval for perpetual contracts, which will differ from the preset 8-hour funding interval. The trader will only be responsible for funding fees in any direction if he/she has open positions at the time of the scheduled funding fee. If a trader does not have any positions, no funding fees will be charged. If you close a position before the point at which the funds are charged, you will not receive or be charged any funds.

There is a 50 second deviation in the actual time of charging of money fees. For example, when a trader opens a position at 08:00:05 UTC, the funding fee will still apply to the trader (and the funding fee will be paid or received).