Key Features of the New System
- •The feature dynamically adjusts funding settlement frequency based on market volatility.
- •The adjustment is implemented when the funding rate reaches a threshold of ±2%.
- •This mechanism affects perpetual contracts for BTC, ETH, and USDT pairs.
Bybit has announced the launch of an automatic funding rate adjustment feature for its perpetual contracts, effective from October 30, 2025. This update targets the dynamic management of funding settlement frequency amid market volatility.
Bybit's new automated system aims to stabilize volatility impacts on perpetual contracts, a move closely watched by traders. The system modifies settlement frequency depending on funding rate deviations, offering a strategic edge amid heightened market activity.
Mechanism of Adjustment
Bybit introduces a new system to manage funding rate extremes by adjusting the settlement frequency when deviations reach ±2%. This proactive measure operates hourly until conditions stabilize, optimizing contract management amid market fluctuations. According to the Bybit Official Announcement, "If the funding rate reaches 2% or -2% at 8AM (UTC+8), the system automatically changes the settlement frequency to once per hour. The next day, if the funding rate returns to within ±2%, settlement frequency reverts to once every 8 hours."
Impact on Traders and Assets
Bybit, a prominent crypto derivatives exchange, is launching this adjustment to control funding rate volatility. The system affects perpetual contract holders, notably for assets like BTC and ETH, and strategically aims to balance market conditions dynamically.
Bybit's automatic adjustment mechanism impacts traders dealing with BTC, ETH, and other USDT pairs. This adaptation further tunes finance management during intense trading days, reflecting a responsive operational stance amid heightened conditions.
Market Implications and Expert Opinions
The introduction of continuous funding adjustments underscores the potential financial impacts on liquidity and volatility management. Bybit's innovation is expected to influence trader behaviors, balancing costs and risks dynamically during volatile market periods.
Experts anticipate the technological advances in Bybit's approach may set a new standard for crypto derivatives trading. Historical precedents indicate such adaptive strategies may align perpetual contracts closer to spot prices, enhancing overall market stabilization.