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The premium index measures how far the perpetual contract price has diverged from the oracle price. This divergence drives the funding rate: when the perp trades at a premium, longs pay shorts, incentivizing the price back toward the oracle. When it trades at a discount, shorts pay longs. The oracle may use external price feeds or internal price discovery, including for pre-IPO markets. The formula:

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Impact Prices

The impact bid and ask prices are the volume-weighted average execution prices for a simulated order of a standard size against the order book:
  • Impact Bid Price: Average fill price for a simulated sell order of the Impact Price Quote Size
  • Impact Ask Price: Average fill price for a simulated buy order of the Impact Price Quote Size

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Impact Price Quote Size

The Impact Price Quote Size is $1,000 (notional) for all perpetual markets. There is no per-market differentiation. This applies uniformly across all perpetual markets (equities, indices, commodities, ETFs, and pre-IPO markets).

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Interpretation

The premium index is sampled every minute (60 samples per funding interval) and averaged over the hour to compute the funding rate.

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Funding rates

How the premium index, interest rate and market-specific multiplier determine the hourly funding rate.

Internal price discovery

How order book activity updates the internal oracle used during weekend and pre-IPO price discovery.