Binance announced updates to its funding rate formula and mark price calculations for USDⓈ-M and COIN-M futures on September 18, 2025. The changes refine funding intervals and reduce the mark price moving average from one minute to 30 seconds.
According to Binance’s press release, the update aims to improve liquidity, transparency, and trading efficiency across perpetual and delivery futures markets. Funding rates are crucial in maintaining price convergence between futures contracts and their underlying spot markets. Inaccurate calculations can distort trader behavior. By refining both the funding rate formula and mark price basis, Binance seeks to minimize pricing anomalies and protect users from unnecessary liquidation risks.
The new funding rate formula introduces a scaling factor, dividing calculations by (8/N) where N is the funding interval, instead of applying a flat formula across all contracts. For example, PUMPUSDT, which has a 4-hour funding interval, will now calculate rates as [Average Premium Index + clamp(0.01% – Premium Index, 0.05%, -0.05%)] / 2. This ensures that funding costs remain proportional and fair across assets with varying intervals while maintaining exceptions such as BNBUSDT and ETHBTC, which continue to carry a 0% interest rate.
The mark price calculation will now use a 30-second moving average with 30 data points instead of a 1-minute moving average with 60 data points. This modification applies to both USDⓈ-M and COIN-M perpetual and delivery contracts. According to CoinDesk, similar adjustments in global derivatives markets reduce the lag in capturing short-term volatility, thereby improving price fairness and minimizing liquidation errors during high-stress trading environments.
According to Binance’s corporate profile, the exchange was founded in 2017 and has grown to become the largest cryptocurrency trading platform in the world by daily volume. Its offerings include spot and derivatives markets, staking, Earn products, lending, Web3 wallet solutions, and AI-powered insights. Strategic updates like this to funding rate formulas and mark price mechanisms reflect Binance’s broader focus on strengthening market structure, aligning with best practices from traditional finance, and ensuring a fairer environment for global traders.
