Perpetuals and Funding

Editorial status: PUBLISHED. AI-assisted educational material; user batch approval recorded on 2026-10-19. The numeric example is a fictional USD-linear model, not Deribit inverse settlement or current dYdX protocol execution.

Learning objectives

• Distinguish no scheduled expiry from periodic cash accounting.
• Calculate funding under an explicitly chosen teaching rule.
• Explain why funding incentives do not guarantee profit or price convergence.

No expiry does not mean no ongoing obligations

The official dYdX funding documentation describes perpetual contracts without expiry and a funding mechanism linked to a premium. Its v4 defaults describe sampling and hourly ticks, but governance can change parameters. The page contains a formula/explanation inconsistency, so this lesson does not present either conflicting statement as a verified universal calculation. dYdX: Funding

Deribit's inverse-perpetual specification separately describes its BTC/ETH contracts, coin settlement and funding direction. Positive funding is paid by longs to shorts and negative funding reverses direction under that specification. Daily profit-and-loss accounting is not an expiry delivery event. A numerical inconsistency in one page example is not copied here. Deribit: Inverse Perpetual

These are specific documented designs, not proof that every perpetual uses the same asset, schedule, formula or eligibility rules.

Worked example: receiving funding still permits a loss

Assume a fictional linear USD position has a constant 10,000 notional. For the first assumed eight-hour period, funding is fixed at +0.02%, paid by the long. The long pays 10,000 × 0.02% = 2. For the second period it is −0.01%, so the long receives 1. Net funding cost is 1.

If the position's price profit/loss is −300, the simplified combined result is −300 − 2 + 1 = −301, before fees and liquidation. Receiving funding during one period did not make the position profitable. The short's funding-only net is +1 under the same assumptions, not a guarantee of its total trading result.

Constant teaching notional: 10,000 USD
Period 1: long pays 2
Period 2: long receives 1
Net funding: long −1, short +1
Price PNL for the long: −300 → combined −301 before other effects

The example assumes constant notional and period rates. It is not the coin-denominated inverse calculation used by the cited Deribit contracts.

Quote interval and accrual are different facts

Deribit's funding specifications describe a premium, a damper/deadband and instrument-specific caps. A rate expressed over eight hours does not mean charges occur only once every eight hours: the documented mechanism calculates continuously, with separate cash-accounting consequences. Read the actual time fraction and units before applying a formula. Deribit: Funding Specifications

For a purely assumed proportional teaching model, holding half the first period would produce half its 2-unit funding cost, or 1. That assumption must not be carried into another product without its rules.

Deribit's risk disclosure discusses basis and funding risk, with distinct equity and commodity sections. Commodity contango/backwardation and reference-market timing can matter. The analytical conclusion is that an incentive mechanism is not a performance guarantee; it does not establish that every perpetual must converge at an expiry it does not have. Deribit: Risk Disclosure

Common misconceptions

“No expiry means no settlement or margin demands.” Ongoing accounting and risk controls can remain.

“Positive funding means every holder receives money.” Direction depends on the position and specified mechanism.

“Funding income guarantees profit.” Price losses, fees and liquidation can dominate it.

Risks and limits

No current rate, live parameter, trading availability or jurisdictional permission is asserted. Official documentation is provider evidence, not independent operational testing. The noted source inconsistencies remain unresolved for exact implementation. This lesson does not execute a leveraged position or recommend one.

Exercise and answer

Exercise: Under the fictional two-period model, the long pays 2, receives 1 and loses 300 on price. What is its simplified result? What is the short's funding-only result?

Answer: The long is −301 before other costs. The short receives net funding 1, but its price outcome and total result require separate calculation.

Related learning

Continue in the commodities track with margin and liquidation, then compare different exposure structures.

Source map

dydx-v4-funding, deribit-inverse-perpetual, deribit-funding-specifications and deribit-perpetual-risk-disclosure were actually opened on editorial date 2026-10-19. Sources have distinct product scopes, unknown published dates and no verified reader eligibility. Detailed timestamps and contradictions are preserved in the production source-evidence record. All numeric calculations are original teaching assumptions, not live contract tests.