Funding Rate

One distinctive aspect of perpetual futures is the funding rate. The funding rate is a periodic payment exchanged between long and short traders to converge the perpetual contract price to the underlying asset’s index price: - If the perpetual price is trading above the index (mark) price, the funding rate will be positive, meaning longs pay shorts. Long position holders will pay a small percentage of their position value to short holders at each funding interval. - If the perpetual price is trading below the index, the funding rate will be negative, meaning shorts pay longs.

The funding payments typically occur at regular intervals (for example, every 1 hour or every 8 hours, depending on OrbDex’s settings). On OrbDex, you’ll see the current Funding Rate (%) and a countdown to the next funding time.

How funding affects you: - If you hold a position through a funding timestamp, your account will be debited or credited based on the rate and your position size. For instance, if you are long and the funding rate is 0.01% for the interval, you will pay 0.01% of your position value to the short side. If you are short, you’d receive that amount instead. - Funding payments will adjust your PnL. On OrbDex, the unrealized PnL may already factor in funding (reducing it over time if you owe funding). Alternatively, the payment might be deducted from your balance directly at the interval. Check OrbDex’s approach – usually, it’s reflected as PnL change.

Other Fees: It’s also worth noting: - Withdrawal fees: When you withdraw your collateral from OrbDex back to your wallet, you might only pay the network gas fee. OrbDex itself typically doesn’t charge a withdrawal fee since you are just calling a smart contract to retrieve your funds (aside from gas costs). - Settlement/Expiration: Perpetual futures don’t expire, so there are no settlement fees or rollover fees, only the ongoing funding. - Inactivity fees: Uncommon on DeFi platforms, and likely not applicable to OrbDex, but always good to confirm there are no account inactivity or maintenance fees.

Always consult the official OrbDex fee schedule for exact numbers. As a trader, you should factor in fees and funding to your strategy, since they can impact profitability, especially for long-term positions. High leverage positions held over long periods can see profits eaten away by funding if it consistently goes against you.