> For the complete documentation index, see [llms.txt](https://velocity-1.gitbook.io/velocity-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://velocity-1.gitbook.io/velocity-docs/trading/funding-and-liquidations.md). # Funding and liquidations Two mechanisms keep perpetuals close to the underlying spot or index price. ## Funding Funding is a small payment between longs and shorts that fires once an hour. * If the perp trades above the index, longs pay shorts. * If the perp trades below, shorts pay longs. The top bar shows the current rate and a countdown to the next settlement. The funding column on each position row shows what you've paid or earned since opening. Funding is charged on notional, not margin. Higher leverage doesn't increase funding directly, it just means more notional per dollar of margin. We flag funding rates above ±20% APR in a warn colour so you notice before they hit a position. ## Liquidations If account equity drops below maintenance margin, the venue liquidates. * **Cross:** every position liquidates together. * **Isolated:** only the affected position liquidates. The venue first tries to close at the best price on the book. If that fails, a backstop liquidator takes the position at a discount. A liquidation is contained to the wallet it happens in. Your spot, prediction market, and strategy positions live in separate wallets and are not affected. See [margin protection](/velocity-docs/features/wallet-and-security.md). ## Margin health Each open position shows a coloured bar: * **Green**: comfortable headroom. * **Yellow**: within \~30% of liquidation. * **Red**: within \~10% of liquidation. Add margin or reduce now. The bar reads the venue's live liquidation price. ## Reducing risk Three options when a position is under stress: * **Close**: flatten the position. * **Reduce**: close part of it. * **Add margin**: only available in Isolated mode. Cross uses your whole account already. Don't try to add margin by depositing fresh USDC during a fast move. The deposit takes about a minute to land. That's too slow. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://velocity-1.gitbook.io/velocity-docs/trading/funding-and-liquidations.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.