# Funding Rate Indices

### BTC Funding Rate Perpetual (BTCSWP‑USDYP)

A tradable swap index on the **Hyperliquid BTC funding rate**. It tracks *excess funding;* the difference between realized BTC funding and a trailing average reference (K1).

This creates a two‑sided instrument to:

* hedge funding costs,
* speculate on regime shifts,
* and trade deviations from medium‑term funding trends.

<table><thead><tr><th width="202.3828125">Key Parameters</th><th width="377.6171875">Details</th></tr></thead><tbody><tr><td>Collateral</td><td>USDYP</td></tr><tr><td>Initial Oracle Price</td><td>50,000.00</td></tr><tr><td>Open Interest Cap</td><td>$10,000,000</td></tr><tr><td>Funding Multiplier</td><td>1</td></tr></tbody></table>

### Oracle model&#x20;

During the hour, the oracle **nowcasts** the pending rate using a premium‑based model.\
At the hourly boundary, it ingests the **final realized funding rate** from Hyperliquid and **true‑ups** the cumulative index for accuracy.

Additional constraints:

* wire price moves are clamped (±1% per update),
* quantized to 6 decimals.

Because this is a synthetic index, **MarkPx is designed to track OraclePx closely**.

### Funding setup&#x20;

Configured with a fixed‑leg component:

* `setFundingInterestRates: -0.000097232 per 8hr` (≈ 2.54% APY magnitude)

Economic interpretation:

* **Longs receive the fixed leg** as compensation for what the cumulative index subtracts,
* the combined return is designed to track the underlying funding stream more directly.

### Strategies

* **Hedge (long BTC perp):** go long BTCSWP for a portion of notional to stabilize funding costs.
* **Speculate:** long if you expect funding to exceed its trailing average; short for the opposite.

### Notes & risks

Funding is regime‑dependent and can spike. Use conservative leverage and understand liquidation behavior.

[See more information on market mechanics and parameters](https://docs.nunchi.trade/market-mechanics-and-parameters#funding-rate-perp-market-parameters)

## Additional Resources

[Hyperliquid Funding Comparisons](https://app.hyperliquid.xyz/fundingComparison)

[Trading Market Sentiment Article](https://x.com/Matt_Peters92/status/1988929691399393629)

[HIP-3 Funding Rate Perpetuals / Boros Funding Rate Swaps](https://x.com/PendleIntern/status/1992895540011696631)


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