OKX is introducing a significant upgrade to its funding fee mechanism across all perpetual futures contracts. This enhancement aims to improve settlement efficiency, streamline margin management, and deliver a more seamless trading experience—especially during periods of high volatility or margin stress.
The update will be rolled out in four phases between June and July 2024, affecting hundreds of perpetual futures pairs. While the core logic for calculating funding rates remains unchanged, the way fees are collected and distributed will be optimized to reduce unnecessary order cancellations and improve capital efficiency.
This article breaks down the key changes, explains their impact on traders, and answers frequently asked questions to help you prepare for the transition.
Key Changes to Funding Fee Collection
Before the Update
Previously, OKX applied a conservative approach when collecting funding fees:
- Fees were only deducted up to the liquidation threshold (i.e., when margin level reached 100%). If insufficient funds were available beyond this point, further deductions could trigger partial or full liquidation.
- In isolated margin mode, funding fees were first taken from the user’s transferable balance in cross-margin accounts, which could include borrowed assets if auto-borrow was enabled. If that balance was insufficient, pending open orders would be canceled before fees were pulled from the isolated position’s margin.
- In single-currency cross-margin, multi-currency, and portfolio margin modes, fees were collected from available or adjusted equity. If equity was inadequate, pending orders (including spot and futures) that might reduce net equity were canceled.
This often led to unintended order cancellations—even for users with healthy positions—simply due to temporary imbalances in transferable balances.
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After the Update
Starting June 12, 2024, OKX will implement a more direct and efficient funding fee collection process:
- Funding fees will now be collected in full, even if doing so temporarily pushes the margin level below 100%. Any required liquidation will occur after the fee is processed.
- In isolated margin mode, fees will be deducted directly from the isolated position’s margin balance, not from cross-margin transferable funds. No open orders will be canceled during fee collection.
- In cross-margin modes (single-currency, multi-currency, portfolio), fees will be taken from the relevant cross-margin equity. Again, no pending orders will be canceled during this process.
This change ensures that traders maintain control over their order flow and reduces disruptions caused by administrative fee settlements.
How Funding Fee Distribution Will Improve
Old System
Under the previous model:
- The actual amount distributed to longs and shorts depended on how much the system successfully collected.
- If collections fell short (e.g., due to under-collateralized positions), payouts were pro-rated based on each user’s share of eligible positions.
- All received funding fees were added to the cross-margin equity, regardless of whether the position was isolated or cross-margin.
This sometimes resulted in delayed or reduced income for funding recipients.
New System
With the upgrade:
- The total expected funding amount will be fully distributed among eligible traders.
- For isolated positions, received funding fees are credited directly to the position’s margin balance, improving capital allocation accuracy.
- For cross-margin positions, fees go into the respective cross-margin equity pool, maintaining consistency with account structure.
These updates promote fairness and predictability in funding income, especially for arbitrageurs and yield-focused traders.
Rollout Schedule by Phase
The new mechanism will be deployed gradually to ensure system stability and minimize disruption.
Phase 1 – June 12, 2024, 6:00 UTC
5 Perpetual Futures
- LINK-USD
- LINK-USDT
- LUNA-USDT
- LUNC-USDT
- SHIB-USDT
Phase 2 – June 17, 2024, 6:00 UTC
32 Perpetual Futures
Includes popular pairs such as DOGE-USDT, DOT-USDT, ETHFI-USDT, IMX-USDT, and FIL-USDT.
Phase 3 – June 24, 2024, 6:00 UTC
103 Perpetual Futures
Features major altcoins like AAVE-USDT, ATOM-USDT, AXS-USDT, BCH-USDT, and XRP-USDT.
Phase 4 – July 1, 2024, 6:00 UTC
87 Perpetual Futures
Covers key assets including SOL-USDT, BTC-USDT, AVAX-USDT, ALGO-USDT, and OP-USDT.
After July 1, all perpetual futures on OKX—including newly listed ones—will operate under the updated funding fee framework.
Why These Changes Matter
These improvements address long-standing pain points in perpetual futures trading:
- Fewer Unwanted Order Cancellations: By eliminating forced cancellations during funding collection, traders retain better control over their strategies.
- Improved Capital Efficiency: Direct fee deduction from relevant margin pools reduces dependency on transferable balances.
- Fairer Distribution: Full distribution of collected fees ensures traders receive what they’re owed without proration surprises.
- Greater Predictability: Knowing exactly where fees are drawn from helps in risk modeling and portfolio planning.
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Frequently Asked Questions (FAQ)
Q: Does this change affect how funding rates are calculated?
A: No. The formula used to determine the funding rate—including the premium index and interest rate components—remains unchanged. Only the collection and distribution mechanism is being updated.
Q: Will I face higher liquidation risk under the new system?
A: Not significantly. While fees may now be deducted even if your margin is below 100%, any resulting shortfall will trigger standard partial or full liquidation after the fee is applied. The overall risk profile remains consistent with current practices.
Q: Do these changes apply to both USDT-margined and coin-margined contracts?
A: Yes. The updated logic applies to all perpetual futures regardless of settlement currency—whether USDT, USD (inverse), or other coins.
Q: What happens if my isolated position doesn’t have enough margin to cover the funding fee?
A: The system will deduct the fee from the position’s margin balance. If this causes negative equity, a partial or full liquidation will follow according to standard rules.
Q: Are portfolio margin and multi-currency margin accounts treated differently?
A: No. Both fall under cross-margin treatment. Funding fees are collected from and distributed to the respective cross-margin equity without affecting pending orders.
Q: Can I opt out of these changes?
A: No. The update is mandatory for all users trading perpetual futures on OKX. However, it is designed to benefit traders by reducing friction and improving transparency.
Final Thoughts
OKX’s funding mechanism upgrade marks a step forward in creating a more resilient and trader-friendly derivatives environment. By decoupling fee collection from order execution and ensuring full fee distribution, the platform enhances fairness, efficiency, and reliability for all participants.
Whether you're a scalper, swing trader, or yield seeker using funding rates strategically, these changes offer greater clarity and fewer operational surprises.
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As always, monitor your margin levels closely—especially around funding times—and adjust your positions accordingly to make the most of this improved system.