What Is Mark Price?
Mark Price is the reference price used in perpetual contract trading to calculate unrealized profit and loss and trigger liquidations. It is not the same as the exchange's most recent trade price (Last Price).
Why It Matters
In the perpetual contracts (Perps) market, prices are highly volatile, and a single exchange's latest trade price is easily subject to brief manipulation — whether from a large market sell order, or a flash crash caused by momentary liquidity evaporation. Either event can push the real price several percentage points off course in milliseconds. If Last Price were used directly to trigger liquidations, users could be unexpectedly liquidated by a momentary "wick," with the true market price recovering immediately afterward.
Mark Price is designed specifically to solve this problem. It is based on the index price — a weighted average of spot prices across multiple leading exchanges — plus a reasonable basis adjustment. This more accurately reflects the market consensus price, making the liquidation mechanism fairer and more resistant to manipulation.
Core Mechanics and Key Concepts
1. Index Price
The index price is a composite price for an asset calculated with specific weights from the spot prices of multiple authoritative exchanges (such as Binance, Coinbase, and OKX). Even if one exchange momentarily posts an anomalous quote, the index price remains stable.
2. How Mark Price Is Calculated
Formulas vary slightly across platforms, but the general logic is:
Mark Price ≈ Index Price × (1 + Basis Rate)
The basis rate is typically linked to the funding rate and reflects the premium or discount of the perpetual contract relative to spot. Hyperliquid's mark price mechanism follows similar logic; refer to its official documentation for specific details.
3. Last Price vs. Mark Price vs. Index Price
4. The Relationship Between Liquidation and Mark Price
When the margin ratio of your position falls below the maintenance margin requirement due to losses, the system triggers liquidation using Mark Price as the reference — not Last Price. This means:
- Even if Last Price briefly dips below your liquidation level, your position will not be liquidated as long as Mark Price remains above that level.
- Conversely, if Mark Price genuinely reaches your liquidation level, liquidation will be executed regardless of where Last Price is at that moment.
5. The Link Between Funding Rate and Mark Price
The funding rate settles periodically, determining the flow of funds between long and short positions. Its calculation also depends on the relationship between Mark Price and Index Price. When Mark Price is above Index Price (a premium), longs pay shorts; when below (a discount), shorts pay longs. This mechanism continuously incentivizes the perpetual contract price to converge toward the spot price.
User Scenarios
Scenario 1: A "wick" event occurs An asset on one exchange flashes down, with Last Price dropping from $3,000 to $2,600 (−13%). However, the spot average across multiple exchanges remains near $2,950. Because Mark Price is based on the index price, it only dips slightly to $2,940. The leveraged position is not liquidated. When the wick ends and Last Price quickly recovers, the user's position is protected.
Scenario 2: Assessing the safety margin of a current position In the Perps interface of OneKey App, users can view Last Price, Mark Price, and Index Price simultaneously. When the three diverge significantly, the market is often in an extreme sentiment state or liquidity is temporarily thin. In these moments, pay particular attention to the distance between your liquidation price and Mark Price, and consider reducing leverage or adding margin.
Scenario 3: Understanding fluctuations in unrealized P&L Sometimes you'll notice that Last Price has risen, yet your account's unrealized P&L has not increased proportionally — or in extreme market conditions it may even have declined. This is because unrealized P&L is calculated using Mark Price, not Last Price. Understanding this prevents misreading your account performance.
Viewing Mark Price in OneKey App
OneKey App includes a built-in Perps trading interface supporting real-time market data for multiple assets, including:
- Mark Price: Prominently displayed on the contract detail page — the core reference for assessing position safety.
- Index Price: Viewable in the market panel or contract information bar, useful for comparing with spot to assess premium or discount.
- Liquidation Price (Liq. Price): Automatically calculated by the system after opening a position; dynamically updated based on Mark Price.
- Funding Rate: Displayed by settlement period to help users assess holding costs.
Download OneKey App at https://onekey.so/download/ — the data entry points above are all accessible in the Market or Perps sections.
Risks and Disclaimers
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High leverage amplifies liquidation risk: The higher the leverage, the smaller the buffer between Mark Price and your entry price. Minor fluctuations can trigger liquidation. New users are encouraged to start with low leverage (3×–5×) to become familiar with the mechanics.
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Mark Price is not an executable trade price: Liquidation is triggered using Mark Price as a reference, but actual execution prices may differ due to slippage — particularly in low-liquidity market conditions.
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Funding rates erode holding costs: Holding a position in the higher-premium direction over a long period means accumulating funding rate costs that can become a significant hidden expense. Include this in your overall P&L assessment.
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Index price can also be distorted in extreme conditions: If multiple exchanges simultaneously experience a liquidity crisis, the index price itself will fluctuate dramatically, limiting Mark Price's protective effect.
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Mechanisms vary across platforms: Different exchanges have different Mark Price calculation methods, weighting sources, and update frequencies. Review official documentation before using a new platform. SEC investor education resources can also help build a sound framework for understanding risk.
FAQ
Q1: What does a large gap between Mark Price and Last Price indicate?
A large gap typically means there is a significant divergence in sentiment between the contract market and the spot market, or a temporary liquidity imbalance in one direction. A large premium means longs should be alert to rising funding rates; a large discount means shorts face similar funding cost pressure. A gap that continues to widen is often a signal that a reversal or sharp volatility is approaching.
Q2: Is liquidation triggered by Mark Price or Last Price?
The vast majority of major perpetual contract platforms, including Hyperliquid, use Mark Price to trigger liquidation — not Last Price. This is precisely to prevent abnormal liquidations caused by price manipulation or flash crashes. Confirm a platform's liquidation mechanism in its documentation before using it.
Q3: Is the funding rate charged every day? Is the settlement time fixed?
Settlement frequency varies by platform. Common intervals are every 8 hours or every 1 hour. At each settlement, the platform calculates the amounts to be paid or received between long and short positions based on the funding rate and directly debits or credits holding accounts — no manual action is required. Before opening a position, confirm the next settlement time and the current funding rate direction on the platform's page.
Q4: How can I avoid unexpected liquidation due to Mark Price movements in OneKey App?
Recommended steps: (1) After opening a position, immediately check your liquidation price (Liq. Price) to confirm there is adequate buffer from the current Mark Price; (2) Set a reasonable stop-loss order; (3) In volatile markets, consider reducing your position size or adding margin. OneKey App provides real-time liquidation price display for continuous position health monitoring.
Take Action
Want to fully understand the interplay between mark price, liquidation mechanics, and funding rates before trading with real capital?
- Download OneKey App and observe the real-time changes in Mark Price, Last Price, and Index Price through a simulated or small-sized Perps position.
- Consult Hyperliquid's official documentation for detailed calculation formulas and risk control mechanisms.
- Visit onekey.so to explore a broader range of on-chain asset market data tools and build a complete market knowledge base.
Understanding mark price is a foundational step for perpetual contract trading — learn the rules before entering the arena.
