What is Margin Funding?
Margin Funding refers to the practise of lending out your funds to margin traders to earn & receive interest. For a more detailed overview, see Intro to Margin Funding.
Is this risk-free money?
No. There are a number of risks associated with margin funding, an overview of which can be found here.
How is the return on offered funding calculated?
The return is calculated hourly, at the rate set by the funding provider. When you open a position, the system chooses the best offers to leverage your trade.
When do I receive my return payment?
Funding payouts are performed every day at 00:00 GMT (even for funds returned earlier in the day). You can visit your Reports page and look at the "Balance" for the specific currency you are lending and review your history of payouts.
The balance report for the currency you are lending will show entries titled "Margin Funding Payment on Funding wallet" and a Green number indicating the payout credited to your balance.
What is the minimum amount I can use for funding?
The minimum amount is the equivalent of 50 USD. A more detailed overview of the minimum amount in relation to the Auto Renew feature can be found here.
Why was my Margin Funding closed?
There are a few potential reasons your Margin Funding position closed.
1. The duration you specified for your funding expired and your funding was returned to you by the system.
2. The funding taker (borrower) manually closes a position and returns your funds.
3. The trade of the funding taker is liquidated and your funds are returned by the system.
4. The funding taker decides to return your funding without using it.*
If a borrower takes your margin funding offer, opens and closes a trade position and subsequently returns your funds, all within 1 hour, interest will be charged to the borrower for that first full hour.
*In an effort to dissuade manipulative funding behavior and ensure fair platform use for all, Ethfinex will charge a full days interest to the borrower on any funding that is borrowed and returned without being used.
Can Margin Traders withdraw the funds they are using?
No. The funding a trader takes serves only to open margin positions. The actual funding remains in either the funding providers account, or on the exchange as part of a traders position.
What is the Auto-Renew feature?
The "auto-renew" feature for providing funding is an energy-saving tool that allows funding providers to ensure they are always offering their available funds (and re-offering earnings on their funding). The minimum amount to automatically trigger one offer is a funding wallet balance of $30 USD or the equivalent in other currencies.
Auto-renew will automatically offer available funds in your Funding Wallet. This can occur as funding interest accumulates, as a funding term expires, if funds are released by the borrower, or simply by depositing additional funds to your funding wallet.
Example of Auto-renew Funding: You are providing funding and receiving daily interest payments. As soon as you accumulate $30 USD equivalent in your Funding Wallet, that amount will automatically be offered, as well. This feature provides a way to automatically re-offer your profit from provided funds.
Can I take back my funding early?
No, once funding (financing) has been accepted, it can only be closed by the funding taker (borrower) or by the system upon expiration. Those offering funding cannot take back their funding early. The borrower can return your funds at any time before the maximum lending period ends.
When you provide margin funding, you specify the maximum lending period (2-30 days) for the margin funding to be available to the borrower. If you specify a period of 30 days, the margin funding will only be closed after 30 days have passed, or if the borrower chooses to return your funds early.
If a borrower takes your margin funding offer, opens and closes a trade position, and subsequently returns your funds all within 1 hour, margin funding interest will be charged to the borrower for that first full hour.
In an effort to dissuade manipulative funding behavior and ensure fair platform use for all, Ethfinex will charge one full day’s interest to the borrower on any funding that is borrowed and subsequently returned without being used in a financed position.