Mhairi
March 2, 2022, 1:40pm
1
The DVM should support price requests for a funding rate for the ETH/BTC UMA perpetual. This funding rate represents the change in a synthetic token’s value per second.
## Headers
| UMIP-62 | |
|------------|------------------------------------------------------------------------------------------------------------------------------------------|
| UMIP Title | Add ETHBTC_FR as a price identifier |
| Authors | Sean Brown (smb2796), Kevin Chan (kevin-uma) |
| Status | Approved |
| Created | Feb 24, 2021
| [Discourse Link](https://discourse.uma.xyz/t/add-ethbtc-fr-as-a-supported-price-identifier/260) |
## SUMMARY
The DVM should support price requests for a funding rate for the ETH/BTC UMA perpetual. This funding rate represents the change in a synthetic token's value per second.
*Note*:
This funding rate identifier requires querying for the price of the synthetic token that will be created by a contract using this identifier. Throughout this UMIP, this synthetic will be referred to as ETHBTC-PERP. Since this synthetic has not yet been created, its specific details can not yet be included. This UMIP will be updated once the ETHBTC-PERP has been created to include its address, token name and AMM pool address.
## MOTIVATION
Without an expiry date to keep a synthetic token pegged to its underlying price, UMA’s perpetual contract requires that a funding rate be levied when there is a difference between the synthetic’s price and the underlying index. This will pressure the overvalued side to unwind its position or encourage the undervalued side to create a larger position. This mechanic is similar to what centralized exchanges use to keep their perpetual synthetics in line with its underlier.
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