OKX Revamps Funding Fee Mechanism for Perpetual Futures
OKX, a prominent cryptocurrency exchange, has introduced 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, as announced by OKX.
Changes in Order Cancellation Logic
The new mechanism will modify the order cancellation logic during settlement across four phases. While the calculation logic for funding rates remains consistent, the collection and distribution of funding fees will witness significant enhancements.
Collection Process for Funding Fees
Previously, OKX would collect funding fees up to the liquidation threshold and cancel orders if necessary. In the revised model, OKX will collect the full outstanding funding fee amount, even if it surpasses the liquidation threshold. Partial or complete liquidation will occur if required.
- 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. Inadequate margin balance will lead to liquidation if needed.
- Cross Margin Modes: Funding fees will be collected from cross margin equity without canceling orders. Insufficient equity will trigger partial or complete liquidation as necessary in single-currency, multi-currency, and portfolio margin modes.
Distribution of Funding Fees
The distribution of funding fees will also undergo revisions. Previously, the distributed amount was proportionate to the position value of users eligible for funding fees. However, the platform will now distribute the full amount during settlement.
- Isolated Margin Positions: The funding fee will be added to the margin balance of the position.
- Cross Margin Modes: The fee will be added to cross margin equity.
Phased Implementation of Changes
The updated mechanism will be rolled out in four phases:
- Phase One (June 12, 2024): Initiating the changes for five perpetual futures, including LINK-USD, LINK-USDT, LUNA-USDT, LUNC-USDT, and SHIB-USDT.
- Phase Two (June 17, 2024): Impacting 32 perpetual futures, such as ALPHA-USDT, SUI-USDT, SWEAT-USDT, and FIL-USD.
- Phase Three (June 24, 2024): Encompassing 103 perpetual futures, including AAVE-USDT, CETUS-USDT, GAL-USDT, and MAGIC-USDT.
- Phase Four (July 1, 2024): Affecting 87 perpetual futures, such as 1INCH-USDT, BLOCK-USDT, FET-USDT, and LTC-USDT.
Starting from July 1, 2024, all perpetual futures, including those not mentioned above or newly introduced, will adhere to the updated funding rate mechanism.
For more details, you can visit the official source here.
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