Is the Funding Rate Calculation Method Standardized across All Cryptocurrency Exchanges?
While the core concept and structure are similar, the exact funding rate calculation method is not perfectly standardized across all cryptocurrency exchanges. The primary difference lies in the specific exchanges used for the Index Price, the parameters of the Interest Rate Component, and the precise formula for the Premium/Discount Component.
However, the goal of price alignment remains universal.
Glossar
Funding Rate Calculation Method
Method ⎊ The funding rate calculation method defines the precise mathematical procedure used by perpetual swap exchanges to determine the periodic payment exchanged between long and short position holders.
Funding Rate
Mechanism ⎊ Funding Rate represents a periodic payment exchanged between traders holding opposing positions in perpetual futures contracts, establishing an equilibrium between contract prices and the underlying spot market.
Funding Rate Calculation
Mechanism ⎊ Funding rate calculation within cryptocurrency derivatives represents a periodic payment exchanged between long and short position holders, designed to align the perpetual contract price with the underlying spot market price.