Leading cryptocurrency exchange OKX has announced significant changes to its funding fee mechanism for perpetual futures. According to OKX, this update aims to improve user experience and increase the efficiency of funding fee settlement.
Change order cancellation logic
The new mechanism coordinates order cancellation logic across four steps during the settlement process. The funding rate calculation logic will remain the same, but the method of collecting and distributing funding fees will be noticeably improved.
Funding fee collection
Previously, OKX would collect funding fees up to the liquidation threshold and cancel orders if necessary. In the updated model, OKX collects all outstanding funding fees even if the liquidation threshold is exceeded. If necessary, partial or full liquidation is carried out.
In Isolated Margin mode, funding fees are now collected only from the margin balance of the isolated position, and orders are not canceled during the collection process. If the margin balance is insufficient, liquidation will occur if necessary.
For cross-margin modes (single-currency, multi-currency and portfolio margin), we collect funding fees from cross-margin assets without canceling orders. If there is insufficient capital, partial or full liquidation will be initiated as necessary.
Funding fee distribution
The method of distributing funding fees will also change. Previously, funding fees were collected, so the amount distributed was proportional to the value of the user’s position. The platform now distributes the entire amount during the payment process.
For isolated margin positions, the funding fee is added to the position’s margin balance. In cross margin mode, fees are added to the cross margin assets.
Phased implementation
The new mechanism is implemented in four steps:
- First step: It will affect five perpetual futures, including LINK-USD, LINK-USDT, LUNA-USDT, LUNC-USDT, and SHIB-USDT, at 6:00 AM UTC on June 12, 2024.
- Second step: It will affect 32 perpetual futures: ALPHA-USDT, SUI-USDT, SWEAT-USDT, and FIL-USD on June 17, 2024 at 6:00 AM UTC.
- Third step: As of 6:00 AM UTC on June 24, 2024, we cover 103 perpetual futures, including AAVE-USDT, CETUS-USDT, GAL-USDT, and MAGIC-USDT.
- Fourth step: It will affect 87 perpetual futures, including 1INCH-USDT, BLOCK-USDT, FET-USDT, and LTC-USDT, at 6:00 AM UTC on July 1, 2024.
After July 1, 2024, all perpetual futures, including those not listed above or newly listed, will follow the new funding rate mechanism.
For more information, please visit official sources.
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