Our margin funding feature goes hand in hand with margin trading. If you are not a trader and prefer safer investments, this feature is for you.
Through your Funding Wallet, Bitfinex allows you to provide funding in any of our various funding currencies to traders. You can enter offers with your own chosen terms (return rate, duration, and amount). When an offer is taken by a trader/funding taker, the money in your funding wallet will be used by the trader to buy or sell bitcoins (open a position). When the trader completes a trade by closing the position, bitcoins are bought or sold back and the money is returned to your wallet.
Margin funding interest is paid to the funding provider in the same currency provided.
If a trader borrows USD to long BTC, the trader pays the funding cost to the funding provider in the equivalent value of USD at the agreed upon USD funding rate.
If a trader borrows BTC to short BTC, the trader pays the funding cost to the funding provider in the equivalent value of BTC at the agreed upon BTC funding rate.