> For the complete documentation index, see [llms.txt](https://docs.bbx.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bbx.com/business/on-chain-perpetual-trading/funding-rate.md).

# Funding Rate

The funding mechanism ensures that perpetual contract prices remain pegged to spot market prices. Funding is transferred directly between longs and shorts — BBX does not charge any funding fee.

**Rate Direction:**

* Positive Funding Rate (Perpetual Price > Spot Price): Longs pay shorts.
* Negative Funding Rate (Perpetual Price < Spot Price): Shorts pay longs.

**Settlement Times:**

* Industry-standard: settled every 4 hour.
* Only applies to positions held at the settlement timestamp.
* Positions closed before settlement do not participate.

**Impact on Margin:**

Funding fees are deducted from the available account balance first; if the balance is insufficient, they are deducted from the position margin, causing the liquidation price to move closer to the mark price and increasing liquidation risk.

**Variable Intervals During Volatility:**

During periods of extreme market volatility, the funding settlement interval may be adjusted to accelerate price convergence. Adjustments are made in a transparent manner.