How Does the "Impact Notional" Factor into the Funding Rate Calculation? ⎊ Path

How Does the “Impact Notional” Factor into the Funding Rate Calculation?

The Impact Notional is a concept used by some exchanges to calculate a "weighted" average Mark Price for the Premium Index calculation. It is defined as the notional value of an order that can be executed with a certain maximum price impact.

By using a price derived from a manageable order size, the Impact Notional ensures that the funding rate calculation is based on a realistic, tradeable price rather than a potentially illiquid, extreme Mark Price.

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