Funding rate (Borrow interest)

With a long position (Pay)

FR = quoteBorrow * (leverage - 1) / leverage - baseSupply

In there:

• quoteBorrow = USDC borrow APY on AAVE

• baseSupply = token Supply APY

QuoteBorrow and baseSupply fluctuate in timeframes, check latest rate at: https://app.aave.com/markets/

For example: I use USDC on my wallet to open an ETH long position with 4x leverage at the time this docs is written

my FR = 5.71% * (4-1)/4 - 1.77% = 2.5125% 

-> I have to pay 2.5125% of total volume annually as borrow fee (this rate is changed depend on pool supply)

With a short position (Earn)

FR = baseBorrow - quoteSupply

• quoteBorrow = token borrow APY on AAVE

• baseSupply = USDC Supply APY

For example: I use USDC on my wallet to open an ETH short position with 4x leverage at the time this docs is written

my FR = 2.52% - 4.01% = -1.49%

-> I get 1.49% of total volume position annually as commission interest