The fair price (also referred to as the mark price) is used to determine unrealized profit and loss (Unrealized PNL) and to avoid unnecessary liquidations caused by short-term market volatility. It is calculated based on the Index Price and Funding Rate.
Formula: Mark Price = Index Price × (1 + Funding Rate × Time Factor)
This ensures that the mark price follows the broader market trend rather than temporary fluctuations on any single exchange.
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