What Is the Concept of a ‘Reference Rate’ in Cryptocurrency Markets?

A Reference Rate, often called an Index Price, is a calculated value used as a standard benchmark for pricing and settlement in financial products, especially derivatives. In crypto, this rate is typically an aggregate of prices from multiple, high-liquidity exchanges, often weighted by volume.

It is used to ensure that derivatives contracts, such as perpetual futures, settle fairly and are not easily manipulated by price action on a single exchange.