#forum Funding fee is designed to minimize the gap between perpetual futures and the true underlying asset.
But on Binance, funding is calculated using the index price, not Binanceâs own spot price.
This caused a real issue on FLOWUSDT:
đ SpotâPerp spread stayed >5â15% for days
đ Funding rate often had the wrong sign (see data)
Why?
Index price broke because other exchanges had deposits/withdrawals halted or delayed, so their spot prices were inaccurate.
Result: arbitrage couldnât function, and funding failed its purpose.
If funding were calculated purely between Binance Spot & Binance Perp, this persistent spread would not exist.
Index price makes sense for liquidation & manipulation protection â
but funding fee â liquidation logic.
After days of back-and-forth with support, thereâs no path to reach the technical team for clarification.
Would appreciate an explanation from the team đ
@binance @BinanceFutures @cz_binance