How the Underlying
Market Works.
Before strategy, understand the market. This page explains funding, positioning, and related mechanics — not how DefiX implements a strategy.
Long vs Short.
In perpetual markets, long and short positioning create opposing exposures. Funding helps balance that positioning over time.
Funding Creates a Market Mechanism.
Funding payments help balance long and short positioning in perpetual markets.
LONG POSITION
SHORT POSITION
When Positioning Skews,
Funding Conditions Shift.
Funding rates reflect conditions between long and short interest. Imbalance can change the economics of holding a position.
Different Venues.
Different Funding Conditions.
When funding conditions differ across venues, a funding differential can emerge.
EXCHANGE A
Higher Funding
FUNDING DIFFERENTIAL
EXCHANGE B
Lower Funding
Gross Spread ≠ Net Return
A visible funding differential is only one part of market economics. Costs and execution conditions matter.
Funding
Borrow Costs
Slippage
Execution
Hedge Costs
Other Costs
GROSS FUNDING DIFFERENTIAL
BORROW COSTS
SLIPPAGE
EXECUTION
HEDGE COSTS
NET ECONOMICS
Reduce Directional Dependence.
Market-neutral structures aim to focus on mechanics such as funding differentials rather than predicting the next price move alone.
Mechanics Understood.
See How DefiX Applies Them.
Strategies explain how DefiX uses these mechanics. How It Works explains the system workflow.