Mark Price

Venkate perpetual contracts use a uniquely designed mark price system to avoid unnecessary forced liquidations in highly leveraged products. Without this system, the mark price could deviate unnecessarily from the price index due to market manipulation or lack of liquidity, leading to forced liquidations. All forced reductions, settlements, and forced liquidations use the mark price method.

This system sets the mark price as the mark price rather than the latest trading price, thus avoiding unnecessary forced liquidations.

Mark Price Mechanism

For perpetual contracts, the mark price equals the index price of the underlying asset plus a funding fee basis that decreases over time.

All automatic deleveraging contracts use the mark price method. Note that this method only affects the liquidation price and unrealized profit and loss; it does not affect realized profit and loss.

Note: This means that once your order is executed, you may immediately see a positive or negative unrealized profit and loss. This occurs because of a slight deviation between the mark price and the transaction price. This is normal and does not mean you have lost funds, but be sure to pay attention to your liquidation price to avoid premature forced liquidation.

Calculating the Mark Price for Perpetual Contracts

Mark Price = Median* (Price 1, Price 2, Contract Price)

• Price 1: Price Index * (1 + Funding Rate * (Time Until Next Funding Fee (hours) / Funding Fee Interval))
• Price 2: Price Index + Moving Average (30-minute basis)*
• Moving Average (30-minute basis): Moving average of ((Bid1 + Ask1) / 2 - Price Index) sampled every minute over a 30-minute interval.
• Median: The middle value of Price 1, Price 2, and Contract Price. For example, if Price 1 < Price 2 < Contract Price, the mark price is Price 2.

Please note that if the market experiences extreme conditions or price source deviations causing a significant divergence between the spot price and the mark price (Abs(Index Price - Mark Price) / Index Price > 1%), Price 2 will be used as the mark price.

Additionally, when reliable reference data sources are unavailable due to index price distortions, the latest transaction price protection mechanism will update the mark price until normal conditions are restored. The latest transaction price protection temporarily switches the contract price marking method to the contract's latest transaction price plus a certain limit to calculate unrealized profit and loss and liquidation lines, minimizing unnecessary forced liquidations during this time.