Funding On Polynomial
A new approach
A new approach
Polynomial uses a model called "Funding Rate Velocity" which represents a new approach to compute funding on the blockchain. This model continuously changes funding rates on a block-by-block basis, based on uncorrected position imbalances. As a result, funding rates vary while smoothing out funding rate trajectories.
For more information on this model, please refer to: .
Funding is not directly proportional to the skew of long and short positions. Instead, the skew is a parameter used to calculate the funding rate velocity.
📈 If the skew is long, funding increases.
📉 If the skew is short, funding decreases.
⚖️ If the skew is neutral, funding remains the same.
This means that if a large number of big traders suddenly start buying or selling, the funding you have to pay (or receive) will not change immediately, but it may change later if the trend continues. Additionally, you may have funding to pay (or receive) even if the number of buyers and sellers are generally equal (neutral skew).
The new on-chain funding calculation mechanism offers new opportunities and earning strategies for Polynomial users. You can read more about the strategy .