Funding

Zero until the house is meaningfully one-sided in a stock. Past that, the crowded side pays the uncrowded side hourly, at a rate locked before it applies.

Funding is hourly, all day, like Hyperliquid's, with three differences: it is driven by the house's position, not by a premium to an index; it is zero until the house is meaningfully one-sided (past 15% of its net limit in that stock); and the rate for each hour is locked and shown before the hour starts.

The crowded side of a stock pays the uncrowded side. The house holds whatever imbalance the traders leave, so it sits on the uncrowded side and receives a share of what the crowded side pays.

Funding is only ever money moving from payers to receivers. The house never pays funding, and nobody is paid funding that someone else has not actually paid in.

Why it exists

Without funding, being long is free for as long as you like. When everyone piles into the same side of a trending stock, the house holds the opposite position for weeks and is paid nothing for it. Funding makes the crowded side pay for the risk it pushes onto the house, for exactly as long as it holds.

The rate

At each lock the contract takes the time-weighted average of every stock's open positions over the previous hour, sampled every block (not a snapshot at the lock):

L = average total size of open longs over the past hour
S = average total size of open shorts over the past hour
net = L − S                                (the house holds −net)
limit = the house's net limit in this stock for the current session
x = min(1, |net| / limit)
hourlyRate = 0                                       if x ≤ 0.15
hourlyRate = maxHourlyRate × ((x − 0.15) / 0.85)²    if x > 0.15

The crowded side is longs if net is positive, shorts if negative.

No funding while the house is within 15% of its limit. A stock's book is almost never exactly balanced, so there is a free zone: until the house's net position passes 15% of its limit in that stock, nobody pays funding. The app shows the free zone in dollars for every stock, for example "funding starts once the house is net more than $60,000 long". Past the free zone the rate rises smoothly, with no jump, and reaches its maximum exactly as the house reaches its limit, where new opens on the crowded side stop anyway.

The free zone is measured on the house's net position, not on the long/short split, so opening matching longs and shorts in two wallets does not change it.

At high leverage funding is a real cost: a 1000x long on a stock where the house is at three-quarters of its limit pays almost half its margin per hour. Funding counts toward equity, so on its own it can push a high-leverage position to its bust price.

Example: at the $2M launch floor, the house's regular-session limit in NVDA is $400,000 net, so funding is zero until the house is net $60,000 one way. If longs exceed shorts by $200,000, x is 0.5 and longs pay 0.0155% of their size per hour. Overnight the limit is a quarter, $100,000, so the free zone is $15,000. As the pool grows, every figure grows with it.

When the rate locks

Because the rate comes from an hour's average, briefly crowding a stock just before a lock barely moves it, and briefly balancing it just before a lock does not dodge funding either. The rate is still fixed and shown before the hour it applies to.

The Friday 19:50 rate covers the last 10 minutes of after-hours and the whole weekend, about 48.2 hours. Holidays work the same way: the last lock before the market closes covers the closed hours.

Who pays whom

Each stock has a funding pot. Funding moves through it, never through the pool.

1. Payers pay in. Every crowded-side position pays hourlyRate × its size for each hour held, accrued by the second. Each hour it is taken from that position's margin into the pot: cash the exchange already holds, so it cannot go unpaid.
2. Receivers are paid out of what was paid in. Uncrowded-side traders share the pot in proportion to their size, at no more than hourlyRate × their size per hour.
3. The house gets whatever is left over: its share for the imbalance it carries.

In numbers, with C the crowded side's live size and U the uncrowded traders' live size:

What goes in always equals what comes out. If the crowd closes straight after a lock, receivers simply share less, because less was paid in; the pool never makes up the difference.

Because accrual is by the second, a position held for ten minutes pays or earns ten minutes' worth.

Weekends and holidays. At the Friday 20:00 close nobody can open or close until Sunday 20:00, so C and U are fixed. The whole closed period's funding is taken from crowded-side margins into the pot at 20:00, at the rate locked at 19:50, and credited to receivers and the house at the same moment. A position held into a weekend must have enough margin left to cover it; any that would not is closed from 19:50 with the other above-limit positions.

Predictable by design

• One public formula. Its inputs are the hour's average open positions, which are on-chain, and the house's net limit in that stock.
• Known before it applies. Each hour's rate is fixed at the lock and shown on every stock and every position. Payers know exactly what they pay; receivers know the most they can earn (the full rate, unless the book flips). The app also shows what the next hour's rate would be on the current average.
• No discretion. Nobody can set a rate by hand. The maximum rate, the 15% free zone and the curve can change only through the owner's 7-day timelock; the limit moves only with the pool and the session, by formula.

How it settles

Each stock keeps running funding totals for each side and its pot. A position records the totals when it opens and settles the difference, plus the accrual since the last hourly collection, when it closes or is liquidated. Positions are never edited.

• Funding paid comes out of the position's own margin. Accrued funding counts toward equity, so paying funding moves the bust price closer and receiving funding moves it further away. Liquidation checks include it, and because liquidation fires before equity reaches zero, a position's margin always covers the funding it owes.
• Funding received is paid from the stock's pot, which already holds the cash. It is never paid from the pool and never joins the payout queue.
• The haircut and the win fee do not apply to funding. Funding paid does not count as eligible loss for $TRADE.