OKX to Revamp Funding Fee Mechanism for Perpetual Futures

OKX to Revamp Funding Fee Mechanism for Perpetual Futures

OKX to Revamp Funding Fee Mechanism for Perpetual Futures

OKX, a leading cryptocurrency exchange, has announced significant changes to its funding fee mechanism for perpetual futures. The update aims to enhance user experience and improve the efficiency of funding fee settlements, according to OKX.

Changes to Order Cancellation Logic

The new mechanism will adjust the order cancellation logic during settlement across four phases. While the calculation logic for funding rates remains unchanged, the collection and distribution of funding fees will see notable improvements.

Collection of Funding Fees

Previously, OKX collected funding fees up to the liquidation threshold, canceling orders if necessary. In the updated model, OKX will collect the full amount of the outstanding funding fee, even if it exceeds the liquidation threshold. Partial or full liquidation will be carried out if required.

In isolated margin mode, funding fees will now be collected solely from the margin balance of isolated positions, and orders will not be canceled during the collection process. If the margin balance is insufficient, liquidation will follow if needed.

For cross margin modes (single-currency, multi-currency, and portfolio margin), funding fees will be collected from cross margin equity without canceling orders. Insufficient equity will trigger partial or full liquidation as necessary.

Distribution of Funding Fees

The distribution of funding fees will also undergo changes. Previously, the amount distributed was proportional to the position value of users due to receive funding fees. Now, the platform will distribute the full amount during settlement.

For isolated margin positions, the funding fee will be added to the margin balance of the position. In cross margin modes, the fee will be added to cross margin equity.

Phased Implementation

The new mechanism will be implemented in four phases:

  • First phase: June 12, 2024, at 6:00 am UTC, affecting five perpetual futures, including LINK-USD, LINK-USDT, LUNA-USDT, LUNC-USDT, and SHIB-USDT.
  • Second phase: June 17, 2024, at 6:00 am UTC, impacting 32 perpetual futures, such as ALPHA-USDT, SUI-USDT, SWEAT-USDT, and FIL-USD.
  • Third phase: June 24, 2024, at 6:00 am UTC, covering 103 perpetual futures, including AAVE-USDT, CETUS-USDT, GAL-USDT, and MAGIC-USDT.
  • Fourth phase: July 1, 2024, at 6:00 am UTC, affecting 87 perpetual futures, such as 1INCH-USDT, BLOCK-USDT, FET-USDT, and LTC-USDT.

After July 1, 2024, all perpetual futures, including any not listed above or newly listed ones, will follow the new funding rate mechanism.

For more details, visit the official source.

Image source: Shutterstock

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