Decentralized exchange Paradex rolled out its Funding V2 system on June 16, introducing a new method for calculating funding rates across long-tail trading pairs. According to Techub News, the system aggregates data from six platforms and recalculates funding rates every second using a weighted median, a setup designed to curb sharp rate fluctuations in less liquid markets.
Under the model, Paradex assigns a weight of 3.5 to its own data, while each external venue carries a weight of 1.2. The exchange also applies an exponential weighted moving average with a 30-minute half-life to smooth the data. Its base interest rate is set at 0.01% per eight hours.
The change is meant to reduce the impact of isolated data points from low-liquidity venues. Early data cited in the report shows funding-rate volatility has already fallen and moved closer to the broader market median, according to CryptoBriefing.
Decentralized exchange Paradex launched its Funding V2 system on June 16, introducing a new mechanism aimed at reducing funding-rate volatility in long-tail trading pairs, according to Techub News.
The new setup pulls data from six platforms and recalculates funding rates every second using a weighted median. Paradex gives its own data a weight of 3.5, while each outside platform is assigned a weight of 1.2.
To smooth the data, the system uses an exponential weighted moving average with a 30-minute half-life. The base interest rate is set at 0.01% per eight hours.
Paradex said the multi-source pricing model reduces the effect of single low-liquidity data points. Early figures cited by CryptoBriefing show funding-rate volatility has declined and moved closer to the market median.
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