Assume time is 12 UTC and that the price of BTC is $37,000 (via bitcoin-dollar real-time index) and the Perpetual trades at $37,100 the whole time until 13 UTC. The average premium is computed as 0.27027% for the 1-hour period (100/37,000). This leads to a funding rate of 0.27027 / 24 = 0.01126125% per hour.

Now assume that you are in a short position of 2 BTC, with 1 BTC perpetual contract valued at $37,100. If you hold this position from 13 to 14 UTC, and the premium in the 13 to 14 UTC period remains as 0.27027%, then you will be paid funding of 8.3558475 USD for the one-hour period [(2*37100)*0.0001126125]

Assume time is 12 UTC and that price of BTC is $37,000 and the Perpetual trades at $39,700 until 13 UTC. The average premium is computed as 7.297297% for the 1-hour period. This leads to a funding rate of 7.297297 / 24 = 0.30405404% per hour.

The maximum funding rate per hour in any given period is 0.25%. The minimum is -0.25%.

As a result, this 0.30405404% hourly rate is floored to 0.25% per hour, so that the maximum 24 hour realisation will not exceed 6%.

Note that there is no "dampening" of rates done in this model: if a 1 hour computed rate is near 0, then it will pay out non-0 value even if it is de minimis.

Assume time is 12 UTC and that the index spot price of BTCUSD is $37,000, and the relative rate set for the 1 hour period is 0.05% per hour.

Now assume the time is 13:30 UTC and the perpetual trades at $38,000 and you enter a Short position of 4 BTC at this price.

You will immediately begin receiving funding at an absolute rate of 0.05%*$37,000 = 18.5 USD per hour per unit.

In your available balance you will then see this rate applying in your unrealised PnL through continuous funding payout equal to:

• 18.5 * 4 BTC = $74 per hour
• $1.233 per minute

This will pay out continuously until 14 UTC where the relative funding rate will change based on the market activity between 13-14 UTC.

In your 4 BTC short position at the end of the half hour period you will have $36.99 applied in your account log at 12 UTC.

Assume this new relative funding rate is now 0.03% and the real-time spot index is $37,900 for BTCUSD at 14 UTC. 

From 14 UTC to 15 UTC a new absolute funding rate will begin applying of 0.03%*$37,900=$11.37 per hour per unit.

Assume time is 14 UTC and you enter a position long 2 BTC on BTCUSD at 37,000. Assume that the funding rate for the one-hour period (13-14 UTC) is set as -0.04% per hour.

At 15 UTC, after you have held this position for one full hour, you will have earned $29.6 [(0.0004*2 BTC)*37,000], which credits continuously throughout the hour period you hold it.

However, during this period, the price was at a premium and so the new one-hour rate set for 14 - 15 UTC is 0.04% per hour. After one hour of holding the position, you have paid $29.6 and you close at 16 UTC.

Your funding for the two hour period you held the position is thus + $29.6  for the first period and then - $29.6 for the first second and your net flows are 0 for this.

Assume it's 12 UTC you are in a 5 BTC long position on BTCUSD with spot index at $37,000 and the rate in the funding period is -0.08%. This earns you funding of:

• 0.0008 * 5 * 37,000 = $148 for the period
• $2.4666667 per minute
• $0.04111111 per second
• $0.00004111111 per millisecond

This credits and debits every millisecond to every user with an open position. It credits first as unrealised profit and loss, but you have the funds available right away to use in further positions or transfer into your Cash account.

The funding is booked into your account log and realised when one of the following events occur:

1. You adjust your open position up or down by any amount
2. You hold until the end of the Funding Period, at which point it is booked (occurs at the end of every hour)

Assume it's 12 UTC you are in a 3 BTC long position on PF_BTCUSD with spot index at $37,000 and the rate in the funding period is -0.05%. Assume that you have set your profit currency as ETH and you hold this position until the end of the funding period at 13 UTC.

0.0015*37,000*3 = $55.5 per hour

At the end of the period at 13 UTC, assume that the price of ETH is 2,500 (from the ether-dollar real-time index)

The conversion can be calculated using the following:

= Amount in USD to be converted / (Target currency index * (1 - 0.25%))

= 55.5 USD / (2,500 ETHUSD * .9975) 

= 0.022 ETH

An example of what this would look like in the account logs: