Dear Community,
In order to optimize user experience and benefits in Futures trading, Nami will introduce the Funding Rate mechanism from 16:00 on October 23, 2022 (UTC). This Funding Rates mechanism will replace the Swap Fee mechanism applied before.
For the convenience of users, Nami will conduct the following steps:
- From 05:00 on October 23, 2022 (UTC), the system updates the new interface and displays the funding rate, at the same time, applied a free swap fee for all positions activating from this time.
- At 16:00 on October 23, 2022 (UTC), the system will pay Funding Rates for the first time.
What is the Funding Rate?
Funding rates are periodic payments between traders to make the perpetual futures contract price close to the index price, or the underlying crypto constituting the futures contract. A perpetual futures contract is an agreement to buy or sell an asset at a predetermined price without an expiration date on the contract.
When the the funding rate is positive, traders who are long on a perpetual contract will pay a funding fee to traders on the opposing side. On the other hand, when funding rate is negative, traders who are short on a perpetual contract will pay a funding fee to long traders.
Why is this important?
The funding rate is primarily used to force convergence of prices between the perpetual contract and the underlying asset.
Unlike traditional futures, perpetual contracts have no expiration date. Thus, traders can hold positions to perpetuity unless he gets liquidated. As a result, trading perpetual contracts are very similar to spot trading pairs.
As such, crypto exchanges created a mechanism to ensure that perpetual contract prices correspond to the index. This is known as Funding Rate.
How are Funding Rates calculated?
Funding rates are calculated using the following formula:
Funding Amount = Position Volume × Funding Rate
(Position Volume = Market Price x Size of Contract)
Please note that Nami takes no fees from funding rate transfers as funding fees are transferred directly between traders.
By default, funding payments occur every 8 hours at 00:00 UTC; 08:00 UTC and 16:00 UTC for all Nami Futures perpetual contracts. In the event of extreme market volatility, Nami reserves the right to update the funding interval of a perpetual contract that differs from the default 8-hour funding interval as described below.
Important Notice
- Funding fees (if any) will be deducted from the available balance in your Futures Wallet. If you have an insufficient available balance in your Futures Wallet, the funding fees (if any) will be deducted from your position margin, which may affect your liquidation price. Please manage your positions accordingly to avoid any liquidation risks.
- Traders are only liable for funding payments in either direction if they have open positions at the pre-specified funding times. If traders do not have a position, they are not liable for any funding. If you close your position prior to the funding time, you will not pay or receive any funding.
- There is a 15-second deviation in the actual funding fee transaction time. For example, when a trader opens a position at 08:00:05 UTC, the funding fee could still apply to the trader (either paying or receiving the funding fee).
- Users can tracking the information of funding rates and other trading rules for each pair on Infor tab
- The countdown to the Funding Time has a value of reference only, the actual Funding Time will depend on the system time from the server
- Futures trading around the Funding Time is very risky because the asset price fluctuates strongly and the system needs a longer time to process the market orders than usual, users need to consider carefully before opening positions around those time.
Adjustment of Funding Interval
In the event of extreme market volatility, Nami reserves the right to update the funding interval of a perpetual contract that differs from the default 8-hour funding interval. Users can visit the Real-Time Funding Rate and Funding Rate History pages to find out the latest funding interval.
Further information:
How to check Funding Rate on Nami Exchange website?
Step 1: Access the Nami.Exchange, select the Futures in Product tab
Step 2: Select the Funding/Countdown at the Futures interface
Step 3: User can read more about the Funding Rate, then select Funding history to check the index
Step 4: Users can check real-time Funding rate as well as Funding history for each trading pair
How to check Funding Rate on Nami Exchange application?
Step 1: Access the Nami Exchange application, select Futures on the toolbar. Then select Funding / Countdown at the interface
Step 2: Users can read more about the meaning of Funding Rate, then select Funding History to check order details
Step 3: Users can check real-time Funding rate as well as Funding history for each trading pair
How to check Funding Rate on ONUS application?
Step 1: Access the Nami Exchange application, select Futures on the toolbar. Then select Funding / Countdown at the interface
Step 2: Users can read more about the meaning of Funding Rate, then select Funding History to check order details
Step 3: Users can check real-time Funding rate as well as Funding history for each trading pair
Best Regards,
Note: Nami reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reasons without prior notice.
About Nami Corporation
Nami Corp. is a FinTech startup operating in the field of Investment and Technology based on Blockchain technology. Over the years, Nami has developed an ecosystem of key products and services to comprehensively support investors, optimize community benefits with the slogan “Change mindset, make giant steps”.
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