Glossary
Key terms.
Terms
- APR — Annual Percentage Rate. Funding rate × intervals per year × 100.
- Basis — Difference between perp mark and spot price. Funding is the mechanism that mean-reverts the basis.
- CV — Coefficient of variation (stddev / mean). Used as our stability score.
- Delta-neutral — Equal-size opposite positions; price moves cancel.
- Funding interval — How often the funding rate settles. 1h, 4h, or 8h depending on venue.
- HIP-3 — Hyperliquid Improvement Proposal #3, framework for sub-DEXs built on Hyperliquid infrastructure.
- Mark price — The price the exchange uses for marking PnL and triggering liquidations. Usually an oracle-derived value, not a single book's mid.
- Open Interest (OI) — Total notional value of all open positions on a market. Indicator of liquidity and crowd interest.
- Spread — In funding arb: short-leg APR minus long-leg APR. In price arb: price gap between two venues quoting the same asset.
- Settlement — A funding payment event. At each interval boundary, longs pay shorts (or vice versa).
- Virtual liquidity — DEX without a traditional order book (uses AMM, RFQ, or oracle pricing). Slippage harder to model.