Protocol Update: Adjustment to the Futures Funding Rate

At Deri Protocol, our goal is to provide a seamless and competitive user experience, ensuring our offerings align with industry standards. With that in mind, we would like to announce a significant update to our perpetual futures’ funding rates, designed to keep us on par with major centralized exchanges (CEX) like Binance and BitMEX.

The New Calculation

Let’s break down the changes in our funding fee calculation:

Before the Update:

DailyFundingFee = (MarkPrice — IndexPrice) * 1Day / FundingPeriod

After the Update:

DailyFundingFee = (MarkPrice — IndexPrice) * 1Day / FundingPeriod + IndexPrice * BaselineDailyFundingRate

Key Component: BaselineDailyFundingRate

We’ve introduced a BaselineDailyFundingRate set at 0.03%. This essentially means the daily funding fee paid by long positions will increase by 0.03% of the underlying asset’s price. Conversely, short positions will benefit from this change, as will liquidity providers in the absence of short positions.

As an example, a long position of 1 BTC (@ $57,000) will require to pay an additional 57,000 * 0.0003 = 17.10 USDC to their daily funding fee to sustain their position. Shorts will receive an additional 17.10 USDC as the counterparty.

Impact on Users

• For Longs: The daily funding fee will see a slight increase, reflecting the addition of the baseline interest rate component.
• For Shorts: This update provides a more favorable funding environment, potentially increasing gains from hedged positions.
• For Liquidity Providers: In the absence of short positions, liquidity providers stand to gain from the added funding fee component.

Moving Forward

This update is a testament to our dedication to enhancing Deri Protocol’s offerings and ensuring our users receive a top-tier trading experience. We believe this change will help us stay competitive while delivering consistent value to our community.

Stay tuned for more updates as we continue to innovate and improve our platform. Thank you for your continued support and trust in Deri Protocol!