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This page describes the price mechanics of Noise markets — how the oracle price is constructed, how market prices are determined, and how funding ties them together.

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Oracle Price

The oracle price is the reference price for each market. It combines two inputs:
  • Attention Factor — the Relevance Index normalized against its own historical average, producing a value centered around 1.0
  • Normalized trading volume — current Noise trading volume divided by its long-term average, also producing a dimensionless ratio
These two components are blended together to form the oracle price. The oracle is updated every 1–3 seconds.
The oracle price is not the price you trade at. It is the reference that the funding rate uses to pull the market price toward. See Funding Rate below.

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Fair Price

The fair price is derived from the order book. It is the quantity-weighted mid-price of the best bid and ask:
  • If more volume sits on the ask side, the fair price is pulled toward the bid
  • If more volume sits on the bid side, the fair price is pulled toward the ask
This reflects actual execution cost more accurately than a simple mid-price.

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Mark Price

The mark price is a 3-minute moving average of the fair price. It is used for:
  • Unrealized PnL calculation
  • Liquidation threshold determination
The moving average dampens short-term order book volatility, preventing transient imbalances from triggering liquidations.

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Funding Rate

The funding rate is a continuous payment between longs and shorts that pushes the mark price toward the oracle price.
  • When the market trades above the oracle price, longs pay shorts
  • When the market trades below the oracle price, shorts pay longs
The rate is derived from the deviation between the mark price and a short-term oracle average, combined with an order book imbalance signal. A fixed interest rate component is blended in with a clamp to limit its contribution.
Funding is accrued per second rather than collected at discrete intervals. This avoids the price jumps that occur around hourly or 8-hourly funding windows on other exchanges.

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Liquidation

Liquidation is a staged process based on the margin ratio — the ratio of margin used to account equity.
StageTriggerAction
Margin CallMargin ratio reaches 80%Warning issued. No forced action — the user is expected to add margin or reduce position.
Preventative LiquidationMargin ratio reaches 90%Partial position reduction to bring the margin ratio below the threshold.
LiquidationMargin ratio reaches 100%Full liquidation via market order.