Index price is the key index of index mechanism. Index price: the price calculated according to the spot market price of several head exchanges, weighted according to different proportions. The index price is used to represent the reasonable prices of mainstream digital currency such as BTC, ETH, LTC, EOS and USDT in the global spot market, which has certain guiding significance. At the same time, the index price is also a key indicator for calculating unrealized gains and losses and judging the position risk in perpetual contracts.
That is to say, whether the user breaks the position is related to the "index price" rather than the market price, and its relevance lies in serving as a reference for planning unrealized gains and losses, while unrealized gains and losses are related to the total amount of unfrozen assets in the account, and whether the unfrozen assets in the account meet the maintenance margin becomes the key to breaking the position.
For the handling of abnormal data sources, 58COIN, which was the first to introduce the exponential mechanism, did this:
The index price will also change rapidly with the latest spot trading price of each exchange in the index composition. If there is an exception, the indexing mechanism of the permanent contract will automatically adjust the abnormal data source in the composition. That is to say, when the spot market price of an exchange is abnormal in the index component, then the abnormal data source will be excluded from the index component by the platform. At the same time, the platform will automatically adjust the weight of other data sources according to the algorithm technology. In this way, when the price of a single exchange deviates greatly, the abnormal situation handling mechanism can ensure that the index fluctuates within the normal range.
Take the 58-currency index mechanism as an example:
At present, the index prices of 58 perpetual contracts (USDT contracts and currency-based contracts) take the weighted average of currency security and spot price of fire coins, and the weight ratio is "70% for currency security and 30% for fire coins".
If the spot market price of an exchange is abnormal in the index component, the platform will remove the abnormal data source from the index component, and at the same time, the platform will automatically adjust the weight of another data source to 100% as the index price at that time.
If the two data sources, Coin An and Fire Coin, are abnormal, the standby data source OKEx is enabled as the index price at that time.
If the currently specified data source and the standby data source are abnormal at the same time, the platform will suspend the service of the contract category involved and wait for recovery.
If any data source is restored, the current index price strategy will be readjusted according to the principle of "specify components first"