# Funding Rates

Whenever the market is imbalanced in the sense that there is more open interest on one side, BNKD holders take on market risk. At a given skew level, BNKD holders take on exposure equal to K (p2−p1) as the price moves from p1 to p2.

Therefore a funding rate is levied, which is designed to incentivize balance in the open interest on each side of the market. Positions on the heavier side of the market will be charged funding, while positions on the lighter side will receive funding. Funding will be computed as a percentage charged overtime against each position’s notional value, and paid into or out of its margin. Hence funding affects each position's liquidation point.\ <br>


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