Pricing

On Foundation, our perpetual markets rely on three key pricing parameters:

Last Price

This is the most recent trading price recorded in the order book for a specific market. The Last Price is primarily used in the calculation of the Mark Price and serves as a trigger condition for Stop orders in Spot Trading.

Index Price

The Index Price is a weighted median of Centralized Exchange (CEX) prices, ensuring reliability as it's independent of Foundation's market data. We use price feeds from the Pyth Network as our primary source for these Index Prices. The Index Price is updated every second by our Pricing module.

Mark Price

Serving as an unbiased and accurate estimate of the fair perpetual price, the Mark Price is crucial for margining, executing liquidations, triggering Take Profit/Stop Loss, and calculating unrealized Profit and Loss (PnL). The Mark Price is refreshed each time a new Index Price is published, which means it updates approximately every second as well.

In Foundation, the calculation of the Mark Price is determined using a specific formula:

Mark-Price = I + I x R x (T / V) 

Where:
- I is Index Price
- R is 1-hour funding rate
- T is Time duration until next funding event
- V is Funding interval (60 mins)