Funding
Premium, damping and the cap that prevents cascades.
Funding is charged on an eight hour cycle, proportional to the premium of mark over index, damped and capped.
| Parameter | Value | Reason |
|---|---|---|
| interval | 8h | convention |
| λ damping | 3 | nudge the mark over several intervals rather than snap it |
| fmax | 0.0075 | a dislocation must not generate a payment that liquidates the book it rebalances |
Longs pay shorts when the mark trades above the index and receive when below, which pulls the two together without anyone settling. Damping is deliberate: an aggressive funding response is itself a source of liquidation cascades.