OKX to Improve the Funding Fee Mechanism for Perpetual Futures

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Perpetual futures trading has become a cornerstone of modern digital asset markets, offering traders continuous exposure to cryptocurrency price movements without expiration dates. A key component of this system is the funding fee mechanism, which helps align perpetual contract prices with the underlying spot market. To enhance user experience and optimize settlement efficiency, OKX is rolling out a refined funding fee mechanism across all perpetual futures in a phased approach.

This strategic upgrade focuses on improving the order cancellation logic during funding fee settlements—without altering the core calculation method for funding rates. The changes aim to create a more transparent, predictable, and trader-friendly environment.

Understanding the Updated Funding Fee Collection Process

One of the most significant improvements lies in how funding fees are collected from user positions. Under the previous system, OKX would only collect fees up to the liquidation threshold (i.e., when margin level reaches 100%). If insufficient funds were available, the platform would cancel pending orders before proceeding with partial or full liquidation.

Now, under the new framework, OKX will collect the full amount of outstanding funding fees, even if doing so pushes the margin level below 100%. This ensures more accurate fee distribution and reduces unexpected order disruptions.

Isolated Margin Mode: Simpler and More Direct

Previously, funding fees in isolated margin mode were deducted first from the transferable balance in cross-margin accounts. If that balance was insufficient, relevant opening orders would be canceled. This could lead to confusion, especially for users managing multiple positions across different margin modes.

Under the updated model:

This streamlines the process and gives traders clearer expectations about how their positions are affected during funding intervals.

Cross Margin Mode: Smoother Equity Management

In cross margin mode—including Spot and Futures Cross Margin, Multi-Currency Margin, and Portfolio Margin—the changes simplify fund handling:

This shift eliminates unnecessary order cancellations and enhances capital efficiency, especially for active traders running complex strategies across spot and derivatives markets.

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Changes in Funding Fee Distribution

The way OKX distributes funding fees to receiving parties is also being upgraded for greater fairness and consistency.

Previously, if the system couldn't collect the full amount of owed fees (due to defaults or insufficient balances), the distributed amount was proportionally reduced based on each recipient's position size. While this ensured no overpayment, it also meant recipients got less than expected.

Under the new policy:

This change promotes a more reliable income stream for long and short position holders participating in funding payments, increasing predictability and trust in the system.

Phased Rollout Schedule for All Perpetual Futures

To ensure stability and minimal disruption, OKX is implementing these updates in four phases, beginning in June 2024.

Phase 1 – June 12, 2024, 6:00 AM UTC

Applies to 5 major perpetual contracts:

Phase 2 – June 17, 2024, 6:00 AM UTC

Expands to 32 additional pairs, including:

Phase 3 – June 24, 2024, 6:00 AM UTC

Covers 103 perpetual futures, such as:

Phase 4 – July 1, 2024, 6:00 AM UTC

Finalizes rollout for remaining 87 contracts, including:

After this phase, all existing and future perpetual futures on OKX will operate under the improved funding fee mechanism.

👉 Stay ahead with real-time updates on OKX’s evolving trading infrastructure.

Frequently Asked Questions (FAQ)

What is a funding fee in perpetual futures?

A funding fee is a periodic payment exchanged between long and short position holders to keep the contract price close to the underlying spot price. It occurs every 8 hours on OKX and is determined by market conditions.

Does this update change how funding rates are calculated?

No. The calculation logic for funding rates remains unchanged. Only the collection and distribution mechanics during settlement are being improved.

Will I face higher liquidation risk under the new system?

Potentially. Since OKX now collects the full funding fee even if it drops your margin below 100%, you should monitor your positions closely before settlement times. However, this also prevents delayed defaults and promotes market fairness.

Do these changes apply to both USDT-margined and coin-margined contracts?

Yes. The updated mechanism applies uniformly across all perpetual futures—regardless of whether they're margined in USDT, USD (inverse), or other cryptocurrencies.

Can I avoid paying funding fees?

You can avoid paying funding fees by closing your position before the funding timestamp (typically at 00:00, 08:00, and 16:00 UTC). However, holding through funding intervals allows participation in directional bets with continuous exposure.

Are newly listed perpetuals included after July 1?

Yes. Starting July 1, 2024, all new perpetual futures launched on OKX will automatically follow the updated funding fee mechanism.

This upgrade reflects OKX’s ongoing commitment to refining its derivatives ecosystem for professional and retail traders alike. By eliminating disruptive order cancellations and ensuring complete fee settlement, the platform enhances transparency and operational reliability in high-frequency trading environments.

Traders are encouraged to review their risk management settings and consider using tools like auto-deleveraging alerts and funding rate calendars to stay informed.

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