FAQ

Pricing

How does pricing work?

Perpetual futures contracts have two standard price components: mark price and oracle price. Mark price is used for margining, unrealized PnL accounting, SP/TL triggers, etc. The oracle price is used for funding rate calculations. There's a third price component specific to HIP-3 specification, which is used for price banding.

During on-hours, oracle pricing is based on an external reference (aggregated price feed of NYSE/NASDAQ pricing with deviation checks for each source provider).

During off-hours, oracle pricing is based on an internal / self-referential price that effectively serves as a smoothened historical average of the local orderbook price (EMA), similar to a traditional hyperp market.

Current mark price design is the median of three inputs: oracle, oracle + basis, and an automatic hl-inserted price. More details on pricing implementation can be viewed on this page: Single-Ticker Equities.

How soon can we get 24/5 pricing or 24/7 pricing?

On-hours pricing will support pre-hours and post-hours in the near future. Additional pricing during the day will be supported via pricing from ATS venues like Blue Ocean to get closer to 24/5. There is no plan for 24/7 on-hours pricing in the near future.

How are "scam wicks" prevented?

Given the early nature of RWA perps, most of the perpetual future markets have low liquidity. "Scam wicks" happen when a perp market's mark price is influenced by the local orderbook price - large orders get executed on the orderbook -> local orderbook price wicks -> mark price wicks. This liquidates users and force exits positions.

Unlike how mark pricing is handled on crypto perps, the mark price from Felix's gold perp and silver perp is solely based on the oracle price, which is derived from higher volume, deeper liquidity external venues. Mark price = oracle price = price aggregation of multiple off-chain venues/sources. This means large orders that wick the local orderbook price will not influence the mark price. This pricing methodology will be applied for all future commodity perps and existing equity perps will also convert to this model.

How is the funding rate handled in off-hours?

For all equity perps and commodity perps, funding rates are capped to +/- 4% annualized in the off-hours. This does not apply for crypto markets, as there are no off-hours.

How are rollovers handled for commodities?

Pricing from the gold perp, silver perp, and oil perp are derived from CFD and spot exchange venues, rather than directly from the CME dated futures markets. For the upcoming commodity markets that go live on Felix, they will have less reliable CFD and spot sources, so pricing will be derived directly from the dated futures markets and rollovers become a significant consideration. More details about how traders should handle rollovers for Felix perpetual futures will be shared in the docs when new commodity markets go live.

Risks

What are the primary risks to using Felix-deployed perps?

Oracle issues

Perp markets require robust pricing feeds. Stale updates or incorrect updates can result in failure to properly reflect real-time position accounting, which can result in unfair liquidations or bad debt.

Price manipulation

Equity perp markets are relatively new in their development. Off-hours pricing is particularly challenging as perpetual futures markets work best when there is robust external pricing. Generally, during off-hours, users will experience lower liquidity and wider spreads. This, along with self-referential pricing dynamics, creates more risk of price manipulation compared to the on-hours environment.

Off-hours pricing can be made more robust with various protections like price clamps and smoothened mark pricing. Initial versions of these protections are implemented in the Felix-deployed perp specifications. Safeguards always involve various tradeoffs - for example, a too laggy mark price that deviates from the local orderbook price can cause issues with healthy liquidations during moments of volatility.

Funding rate spikes

Off-hours pricing, which involves a self-referential oracle, generally means wider deviations between the local orderbook impact price and the oracle price. Wider gaps of these two variables result in higher funding rates. Felix-deployed perps have dampened funding rates during off-hours to manage this risk. This is an experimental design - user feedback is welcome.

Margin Asset (USDH)

What is the margin asset for Felix-deployed perps?

The margin asset is USDH by the Native Markets team.

Why should I use USDH?

USDH perp markets via Felix-deployed perps should be cheap and highly liquid, where users can get best execution.

Specific economic benefits:

• USDH markets have 20% lower taker fees

• USDH markets have 50% better maker rebates

• USDH markets have 20% more volume contribution toward fee tiers

• 50% of USDH revenue goes towards HYPE buybacks (HYPE holders benefit from USDH usage)

VIP Program

How do I access the VIP taker discounts program?

Power users of the Felix-deployed perps may qualify for the VIP program, in which they can access taker fee discounts. Reach out to the team via telegram or discord.