> For the complete documentation index, see [llms.txt](https://pumpbit.gitbook.io/pumpbit-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://pumpbit.gitbook.io/pumpbit-whitepaper/mechanisms/funding-rate.md).

# Funding Rate

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The funding rate is used for positions and spot prices. If the contract price is higher, long positions pay short positions; if lower, shorts pay longs. In the ZSPM model, payments depend on the market maker's position. The rate is calculated hourly:

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DAO sets the interest rate, updated every 5 seconds to calculate the average premium rate. This refined translation aims to convey complex information directly in concise language, minimizing the number of words.