Funding rate

The funding rate keeps perpetual prices aligned with spot and transfers fees between longs and shorts.

Why Funding Rate Exists

Perpetual futures have no expiry date, so they don't naturally converge to spot price like traditional futures. The funding rate is the mechanism that keeps perp prices close to the index price — when there are too many longs, longs pay shorts, and vice versa.

Calculation

Funding Index = Basic Funding Rate × (Net Position in USD / Total Tokens in WLP)

Parameter	Value
Basic Funding Rate	0.068%
Update frequency	Hourly

Direction:

• Long OI > Short OI → Longs pay Shorts (incentivizes more shorts)

• Short OI > Long OI → Shorts pay Longs (incentivizes more longs)

Your Funding Fee:

Funding Fee = (Current Funding Index − Your Entry Funding Index) × Position Size

Positive value = you pay; negative value = you receive.

Worked Example

Assume:

• BTC Market, Basic Funding Rate = 0.068%

• Long OI = $5,000,000, Short OI = $3,000,000

• Net Position = $5,000,000 − $3,000,000 = $2,000,000 (long-heavy)

• WLP Total Value = $10,000,000

Funding Index = 0.068% × ($2,000,000 / $10,000,000) = 0.068% × 0.2 = 0.0136%

You hold a $50,000 BTC Long. After 1 hour:

Funding Fee = 0.0136% × $50,000 = $6.80

As a long holder, you pay $6.80 per hour. Over 24 hours ≈ $163.20.

If you held a Short instead, you would receive $6.80/hr.

Impact on Positions

Funding fees accrue hourly and affect your:

• Effective PnL: Net PnL = Price PnL − Trading Fee − Funding Fee − Borrow Fee

• Liquidation price: Accumulated funding fees consume your margin, shifting your effective liquidation price

In markets with severely imbalanced OI, the funding rate can be high. Check the current funding rate before holding positions long-term.

Fee Attribution

Funding fees are payments between longs and shorts. 100% of the net amount flows to WLP. See Fee Schedule.

Key takeaway: Funding rate updates hourly at a basic rate of 0.068%. When longs exceed shorts, longs pay shorts — and vice versa. The longer you hold, the more funding fees accumulate.