Updates

11/21 Update (Oracle Time Constant):

We reduced the internal oracle time constant from 8 hours to 1 hour for equity perpetuals.

Effect in Practice

• Faster reflection of price discovery - during closed sessions, the oracle now tracks orderflow with a shorter time constant, reducing the gap between “traded price” and oracle.

• Lower funding drag on genuine moves - traders who are directionally right on gap moves keep more of the move (87% vs 10%); shorts who sit through those gaps receive much less funding compensation.

• Same safety properties - the 1 / max_leverage band on mark vs last external spot still limits single-tick jumps and weekend bands in mark.

12/19 Update (scaling factor for funding rate formula):

The default funding rate for crypto perps has remained unchanged at 0.01% / 8 hours since Bitmex first introduced the mechanism in 2016. Borrow rates for traditional asset classes (e.g., equities, commodities) are typically closer to SOFR + 1-2%. We reduced the funding rate across all XYZ markets by applying a scaling factor of 0.5 to Hyperliquid’s funding rate formula. This lowers baseline funding to ~5.5% annualized and results in less aggressive funding during weekend price discovery as well.

The specific formula is Funding Rate XYZ (F) = 0.5 [Average Premium Index (P) + clamp (interest rate - Premium Index (P), -0.0005, 0.0005)].