# 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.


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