2.4 Fair Price

Why using fair price to calculate profits, losses, and forced liquidations?
The platform implements a unique design based on what is called the Fair Price Marking System.
With this system implemented, it avoids situations in high leverage where it normally would
unnecessarily force liquidate. Without this system, the marked price could be potentially
manipulated or due to a lack of fluidity and create a fluctuation in the index price, potentially
causing forced liquidations. This system sets the Mark Price of the contract to the Fair Price
instead of the last trading price, so as to avoid unnecessary force liquidation.

Fair Mark Price Mechanism
The marked price of the perpetual contract is equal to the underlying index price plus the fund
cost basis that decrements over time.
All automatic deleveraging contracts use the marking method.
Please keep in mind: This method only affects the price of forced liquidation and unrealized
profit and loss, it does not affect the realized profit and loss.
Note: Negative or not, unrealized profit and losses may occur immediately after the execution.
This is caused by a slight deviation between the marked price and the transaction price, and it
does not mean any loss. Pay attention to the liquidation price of the contract order and avoid
being forced liquidation early.

Calculation Formula of the Fair Price of Perpetual Swap
The fair price of the perpetual contract is calculated using the basic funding rate:
Basis = Funding Rate * (Time to the next payment of funds / )
Fair Price = Index Price ∗ (1+Basis rate)