Marker price calculation

At DeeBit Exchange, we employ a "Dual-Price Mechanism" to protect users from market manipulation and avoid unnecessary forced liquidations caused by market volatility.

The Dual-Price Mechanism is a protective system composed of the Mark Price and the Latest Market Price, designed to prevent market manipulation. Through this mechanism, users' forced liquidation is determined based on the Mark Price rather than the Latest Market Price, thereby avoiding unnecessary losses caused by market fluctuations. Market manipulation can cause futures prices to deviate from spot prices, triggering a large number of forced liquidations. To create a fair trading environment, DeeBit Exchange has introduced the Dual-Price Mechanism, where the Mark Price is used to calculate users' unrealized profits and losses and helps prevent unnecessary liquidations.

The Mark Price is the fair price of the futures market, calculated based on the Spot Index Price and the Premium Index. Its primary function is to prevent market manipulation and unnecessary forced liquidations. When the trading price deviates from the external spot price, the Mark Price helps stabilize the market price and avoid significant fluctuations.

Mark Price = Median (Price 1, Price 2, Latest Transaction Price) 

Price 1 = Index Price × (1 + Funding Basis Rate) 

Funding Basis Rate = Funding Rate × (Time to Next Funding Fee Payment / Funding Fee Interval) 

Price 2 = Index Price + 5-Minute Moving Average 

5-Minute Moving Average = Average of [(Best Bid + Best Ask) / 2 − Index Price] 

Latest Transaction Price: This is the latest market transaction price on DeeBit Exchange's futures market, typically linked to the spot market to avoid significant deviations from the spot price.

The primary role of the Mark Price is to reduce forced liquidations caused by short-term market fluctuations. Since the Mark Price reflects the "true" market value of the contract, it effectively prevents market manipulation. For example, if the spot price is 5,000andthefuturesmarketpriceis 5,000andthefuturesmarketpriceis5,010. The Mark Price can anchor the external spot price, preventing users from being liquidated due to price deviations.

Futures trading carries significant risks, especially during periods of extreme price volatility, where there may be a substantial gap between the Mark Price and the Latest Market Price. Since unrealized profits and losses are calculated based on the Mark Price, the displayed profits and losses may not match the actual profits and losses. During trading, users must closely monitor the gap between the Mark Price and the estimated liquidation price to avoid forced liquidations caused by market fluctuations. Please note that all trading activities should be conducted with caution. The Mark Price is for reference only, and actual transactions are based on the Latest Transaction Price. The final interpretation of this product belongs to DeeBit Exchange.