Important Changes to Funding Rates and Mark Prices
Introduction
Binance is committed to optimizing its platforms to provide users with the best experience. As part of this commitment, important updates regarding the funding rate formula and mark price calculations for futures contracts will take effect on September 18, 2025. This article details the updates and implications for traders.
Updates to the Funding Rate Formula
Effective September 18, 2025, at 08:01 UTC, the funding rate formula for futures contracts will be revised. Below is a comparison of the funding rate calculations:
| | Before the Update | After the Update |
| — | —————— | —————– |
| Funding Rate (F) | = Average Premium Index (P) + clamp (interest rate per funding interval – Premium Index (P), 0.05%, -0.05%)
Notes: The interest rate is 0.03% daily by default for all contracts except BNBUSDT and ETHBTC. | = [Average Premium Index (P) + clamp (interest rate – Premium Index (P), 0.05%, -0.05%)] / (8/N)
Where N = funding interval, and the interest rate is 0.01% for most contracts. |
As an example, for PUMPUSDT, which has a funding interval of every 4 hours:
- Funding Rate Calculation:
- F = [Average Premium Index (P) + clamp (0.01% – Premium Index (P), 0.05%, -0.05%)] / 2
This change signifies that traders must adjust their strategies accordingly, accounting for the shorter funding intervals.
Adjustments to Mark Price Calculation
In addition to funding-rate changes, Binance Futures will also refine mark price calculations. Starting September 18, 2025, at 08:01 UTC, the basis for Price 2 in the mark price calculation will shift from a 1-minute basis to a 30-seconds basis. Here’s how the mark price calculations will be updated:
| Futures Contracts | Before the Adjustment | After the Adjustment |
| ———————- | ——————— | ——————– |
| USDⓈ-M & COIN-M Perpetual Contracts | Mark Price = Median (Price 1, Price 2, Contract Price)
Price 2 = Price Index + Moving Average (1-Minute Basis) | Mark Price = Median (Price 1, Price 2, Contract Price)
Price 2 = Price Index + Moving Average (30 Seconds Basis) |
| USDⓈ-M & COIN-M Delivery Contracts | Mark Price = Price Index + Moving Average (1-Minute Basis) | Mark Price = Price Index + Moving Average (30 Seconds Basis) |
This adjustment reduces lag in price calculations, allowing for more timely and accurate assessments of mark prices, which is crucial in the volatile futures market.
Implications for Traders
These updates to the funding rate and mark pricing systems are crucial for participants in the Binance Futures markets. Traders should take the following steps:
- Understand New Formulas: Familiarize themselves with the new formulas to optimize their trading strategies closely.
- Adjust Risk Management: Be aware of how these changes might affect their margin calculations and trading performance. Understanding the funding fees will play a significant role in long-term profitability.
- Monitor Market Responses: As the changes go live, monitor market conditions and adjust strategies as needed, staying informed through Binance’s real-time funding rate and funding rate history pages.
Conclusion
Binance continues to enhance its services to align with the needs of its traders. These strategic adjustments to funding rates and mark pricing aim to improve market efficiency. Traders on the Binance platform must adapt to these changes and consider their impact on trading practices. For assistance, users can refer to Binance’s support documentation.