Concept of Funding Token

The Concept of Funding Position

The Funding Position represents the portion of the underlying token’s value that remains after separating out the price risk. Each Funding Position is initialized with a value of 1 USD, and it continuously accrues funding fees over time.

$$Current\ Funding\ Position\ Value =Intial\ Funding\ Position\ Value\times e^{funding APY\times T}$$

The Concept of mUSD

mUSD, also known as the Funding Token, is the receipt token of the Funding Vault, and its price is denominated in USD. Each market has its own independent Funding Vault, which holds Funding Positions for that market. When a Funding Vault is fully composed of Funding Positions, the price of mUSD behaves similarly to a yield-bearing stablecoin — it continuously accrues funding fees over time.