Bibox coin margined contract introduces a new marked price as a reference price for forced liquidation to avoid unnecessary forced liquidation by investors. The mark price is determined by market liquidity. All forced position deduction, settlement, forced liquidation, etc. adopt the marked price method.
The mark price formula of the perpetual contract is as follows:
Mark price = index price * （1 + Funding expense basis rate）
Funding expense basis rate = funding rate * （Time until the next fund rate collection H / 8）
The index price formula is as follows:
EMA [EMA(n) = 2 * (current index-last EMA）/ （n+1 ）+ last EMA] moving average
The price index is a comprehensive price index obtained by referring to the prices of major exchanges based on the weighted average of their trading volumes. Reference exchanges include: Coinbase, Bitstamp, Kraken, Bitfinex, Binance, Huobi, OKEX, Bittrex, HitBTC and other exchanges.
We also take some additional protective measures to avoid poor market performance due to interruption of spot market prices or connection problems. These protective measures are as follows:
- Deviation from a single price source: When the latest price of an exchange deviates from the median price of all price sources by more than 5%, the price weight of the exchange will be set to zero.
- Multi-price source deviation: If the latest price of more than one exchange has a deviation of more than 5%, the median price of all price sources will replace its weighted average and be used as the price index value.
- Exchange connection problem: If we cannot access the data source of the exchange, and the exchange has updated the transaction data within the last 10 seconds, we can obtain the price data from the latest results and use it for the calculation of the price index.
If an exchange does not update transaction data within 10 seconds, the weight of the exchange will be zero when calculating the weighted average.