Benchmark Rates

Sphere’s benchmark rates serve as crypto reference rates, offering a clearer view of market conditions by drawing on multiple data sources.

Supply Benchmark

The Sphere Supply Benchmark is the supply-weighted average supply rate across all stablecoin lending markets tracked by Sphere: (i) Sky, (ii) Spark, (iii) Aave, (iv) Compound, (v) Morpho, and (vi) Fluid.

Borrow Benchmark

The Sphere Borrow Benchmark is the borrow-weighted average borrow rate across all stablecoin lending markets tracked by Sphere: (i) Sky, (ii) Spark, (iii) Aave, (iv) Compound, (v) Morpho, (vi) Fluid, and (vii) Liquity.

Funding Benchmark

The Sphere Funding Benchmark Rate is as an open interest weighted 7-day average across major BTC and ETH perpetual futures markets.

Why are Funding Rates Important?

Perpetual futures are derivative contracts that track the price of an underlying asset (such as BTC or ETH), but has no fixed expiry date. Perpetual futures uses funding rates (a periodic payment, often every eight hours) as a pricing mechanism to keep prices near spot. When the contract price trades above spot, longs pay short; when below, shorts pay longs. This price mechanism helps keep the contract price anchored to the underlying spot price.

Since a positive funding rate means traders are more aggresively long, and a negative reading means most participants are positioning short, perpetual funding rates can help illustrate overall market sentiment.

Formula Breakdown

The Sphere Funding Benchmark pulls funding rate data for BTC and ETH perpetual contracts from the largest centralized exchanges. Each rate is weighted by open interest to accurately reflect the bulk of active positions rather than skewing results by thin markets. The result is then averaged over seven days, smoothing out short term noise while remaining timely enough to identify meaningful changes in market conditions.

Coinglass API

Sphere uses the Coinglass API to fetch historical funding rates for ETH and BTC on futures exchanges (e.g. Binance, OKX), as well as total open interest for both ETH and BTC.