Derivatives Trading Policy

These Derivatives Trading Policies are part of the Mexo Rules which, together with the Mexo Terms of Use and Risk Acknowledgement Agreement (which are visible in the Mexo User Agreement), establish the terms and conditions applicable to the people who participate in the purchase and sale of Derivative Products (perpetual contracts) within the mexo.io Website (the "Site").

These Policies apply to users who use the Derivatives Trading Platform. By clicking on the "I have read and accepted" button, by checking the box presented with the Policies, by accessing or using any of the Mexo Derivatives Trading Services, and/or by creating or funding the Mexo Perpetual Assets Wallet, You acknowledge that you have read, understood and granted your total and unconditional acceptance of all the general and specific terms and conditions established in this Agreement.

IF YOU DO NOT AGREE TO BE BOUND BY THESE POLICIES, OR WITH ANY UPDATE, CHANGE, OR MODIFICATION, YOU MUST STOP USING THE MEXO SERVICES IMMEDIATELY. OTHERWISE, THESE TERMS OF SERVICE SHALL BOUND YOU.

These Terms and Conditions are additional to the Terms of Use that the User accepts and acknowledges knowing regarding the use of the Mexo Platform and Services. To use the services described here, the User must meet the eligibility and registration requirements specified in the Mexo User Agreement and these Policies. Any ineligible person who uses the Derivatives Trading Services, or who accesses the platform in breach of the Mexo Rules, may have their property, funds, or digital assets confiscated.

By reference, the Risk Acknowledgement Agreement, the Privacy Policies, and the Mexo User Agreement are incorporated into this document. In the event of a discrepancy between any of these documents and these Policies, the Derivatives Market Policies shall prevail, only concerning Derivatives Trading Services. Concerning the rest of the Mexo Services, the Mexo User Agreement, or the different specific Policies issued by Mexo must prevail.

The Derivatives Market is sophisticated and complex. Also, it carries a high level of risk and therefore is not suitable for users who do not have the appropriate level of knowledge and experience to deal with them. Mexo has no obligation to advise you on the suitability of the Derivatives Trading Services. Any statement or comment that Mexo or any of its directors, officers, employees, agents, or representatives may make about the suitability of the Derivatives Market to You, under no circumstances, should be considered legal or investment advice and should not be received or relied upon as such. Any use of the Derivatives Trading Services, including the decision to use some type of margin to participate in the derivatives market, is done of your own free will. Therefore, you are responsible for the consequences that this decision may have on your assets, including the loss of all your Digital Assets and other assets that you may have within Mexo.

The operation of the Derivatives Trading Services is provided by Mexo Global Ltd, a company from the British Virgin Islands duly incorporated under number 2038445 and with its registered office at Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands.

THE ARBITRATION AGREEMENT PROVIDED FOR IN THE MEXO USER AGREEMENT IS APPLICABLE TO RESOLVE ANY CLAIM OR DISPUTE ARISING FROM THE USE OF THE DERIVATIVE TRADING SERVICES. BY CONSENTING THESE POLICIES, YOU ACKNOWLEDGE THAT YOU HAVE READ, ACCEPTED, AND UNDERSTOOD ALL OF THE TERMS OF THIS AGREEMENT, INCLUDING THE DECISION TO SUBMIT TO ARBITRATION, AND HAVE TAKEN THE TIME TO CONSIDER THE IMPORTANT CONSEQUENCES OF THIS DECISION.

I. Definition

The definitions contained in the Mexo User Agreement apply to these Policies. Additionally, the following words and expressions will carry the following meaning, except when the context indicates otherwise:

In these Policies, except when the context requires otherwise:

(a) the titles and subtitles are for convenience only and do not affect the interpretation of any section or subsection of these Policies;

(b) a reference to any statute or legal provision shall be taken as a reference to what may have been, or from time to time may, be amended, modified, or re-enacted; and

(c) Words that denote the singular will include the plural and vice-versa, and words that signify any gender will include all genders.

II. Disclosure of risks associated with Derivative Trading Services and waiver of liability to Mexo.

By buying, selling, exchanging Perpetual Contracts, storing Perpetual Assets, or using margin through the Derivatives Trading Services provided by Mexo, you voluntarily and expressly acknowledge, and without limitation:

(a)That such activities are highly risky, volatile, and sophisticated, and you risk losing all your money.

(b) That the Derivative Products are new, and therefore there is minimal experience in these markets from which their present and future behavior can be judged. For the same reason, any position that you hold can be severely affected by sudden movements in the market or its price. YOU MUST TAKE SPECIAL CARE IN THE MARGINS THAT YOU DECIDE TO USE WHEN YOU EXCHANGE DERIVATIVE PRODUCTS.

(c) That in addition to the risks in the trading price of the Derivative Products, there is an independent risk of loss derived from the price of the Underlying Asset on which a specific Derivative Product is based.

(d) That the peer to peer exchange of Derivatives, in general, is not an activity regulated by many countries, and as such, it is not supervised by any authority.

(e) That the Digital Tokens that serve as an underlying asset are not legal tender and are not endorsed by any government or financial institution, and in some jurisdictions, they may even be prohibited.

(f) That the Digital Assets that serve as underlying assets do not have a fully defined legal regime and, therefore, are subject to legislative, political, and/or regulatory changes at the state, federal and international level that could affect their use, transmission, exchange and value, and could even influence in the future the commercialization of Derivative Products based on said assets.

(g) That the functions, characteristics, operation, use, and other properties of the Digital Tokens ("Token Properties") used as underlying assets in the Perpetual Contracts can be complicated, technical, and challenging to understand and evaluate.

(h) That the Digital Tokens, the properties of the token and/or the underlying technology may change or stop working as expected due to a change made to the underlying technology, a change made using the features or functions incorporated in the underlying technology, or a change resulting from an attack, which could severely impact the price of a Derivative Product based on said Digital Token.

(i) That there is the possibility that the conditions for the acquisition and/or exchange of Derivative Products through the platform do not exist.

(j) That there is a risk of loss derived from the calculation rules of the Index, since based on them, the auto-de-leveraging and contract settlement mechanisms are programmed, and therefore assumes the risk of reviewing through the Site the mechanism that Mexo uses to calculate the value of the Index.

(k) There is a possibility that once you have purchased or acquired a Derivative Product, there is no counterparty to whom you can sell or trade the Derivative Product.

(l) That Mexo reserves at all times and, at its discretion, the right to set the minimum maintenance margin requirements. Therefore, there is a risk that you may have a substantial loss if you fail to meet the minimum margin amounts that Mexo requires when you have an open position.

(m) That there is a risk of losses and contingencies of a fiscal nature derived from the conversion of Digital Assets to make payments to cover the financing received or to cover the margins that are insufficient in forced liquidations.

(n) That there is a risk that your position will be forcibly liquidated due to normal or abnormal market conditions or due to insufficient funds.

(o) That Mexo may suspend or reject the execution of any transaction or suspend your access to the Services to comply with any applicable regulation or law.

(p) That third parties can access or use your Mexo Account and carry out operations without your knowledge or authorization, either by obtaining the password for your Mexo Account or by any other method.

(q) That there are risks associated with the use of an Internet-based exchange system that includes, but is not limited to, the failure of hardware, software, and Internet connections.

By accepting these terms, you acknowledge that Mexo is not responsible for the associated risks and assumes and undertakes such risks in the decision to use the Derivatives Trading Services and/or when buying, selling, exchanging, and/or storing Derivative Products at through the Mexo Services.

In turn, by accepting these terms, you acknowledge that Mexo only operates the Derivatives Trading Platform, but is not a counterpart to any Derivative Product, and therefore has no financial responsibility or liability for any breach of any other participant of the market in honoring its obligations in an open position of a Derivative Product.

Consequently, and irrevocably, you, the User, release Mexo from any type of civil, criminal, commercial, administrative, or any other kind of liability, present or future, known or unknown, against Mexo, and its respective shareholders, directors, officers, employees, agents, or representatives related to any of the risks described in these Policies and, therefore, irrevocably waive any action that may be taken to claim any type of liability from Mexo derived from them.

You expressly declare and warrant that you have:

(a) the necessary technical experience and the ability to make use of the Derivatives Trading Services; and

(b) the knowledge, understanding, experience, professional advice, and information to make your own assessment of the merits and risks of participating in the Derivatives Market offered on the Site.

You accept the risk of acquiring Derivative Products using Mexo services, and you are responsible for carrying out your independent analysis of the specific risks of participating in said market. YOU SHOULD NOT PURCHASE ANY DERIVATIVE PRODUCT UNLESS YOU HAVE SUFFICIENT FINANCIAL RESOURCES, AND ACCEPT THE FACT THAT YOU MAY LOSE THE TOTAL VALUE OF YOUR MONEY.

The fact that Mexo supports the exchange of a particular Derivative Products does not in any way indicate the approval or disapproval by Mexo of the underlying asset, the issuer, its team, or its technical document. The acquisition of a Derivative Product is the sole responsibility of the person who decides to do so. MEXO DOES NOT OFFER COMMERCIAL ADVICE, HAS NO FIDUCIARY RIGHTS TO YOU OR ANY OTHER USER, AND MAKES NO WARRANTY ABOUT THE SUITABILITY OF THE DERIVATIVE PRODUCT FOR PURCHASE, TRADE OR OWNERSHIP.

III. Content and publication of the Policies

The content of these Policies includes the text of these Derivatives Trading Policies, and all the various rules that Mexo has published to date or that may be published in the future. All rules are an integral part of these Policies and have the same legal effect. Unless expressly stated otherwise, any service provided by Mexo and its affiliates related to the Derivatives Market is governed by these Policies.

Mexo may deny, restrict and/or condition the Derivatives Trading Services, as well as the information and/or content of the Site, in whole or in part, at its sole discretion, as well as to modify, add and/or eliminate the information, content, services or products, at any time and without notice.

You should carefully read all the content of these Policies before using Mexo Services. If you have any questions about this document, you should consult with Mexo. When you use the Derivatives Trading Services, these Policies and all of their terms, rules, and conditions are linked to you. You accept that you do not have the right to claim that all or part of the rules, terms, and conditions of these Policies are not valid, nor to request the termination or revocation of this Agreement for not having read the content.

You agree to accept and comply with these Policies. If you disagree, you must stop using the Derivatives Trading Services. If you continue to use the Derivatives Trading Services, it means that you are accepting these Policies.

Mexo has the right to modify these Policies and/or the Mexo Rules and will notify you through a public announcement without informing you only. Once the revised Policies and rules have been posted on the Site, they will take effect immediately after the date of their posting on the Mexo Site. If you do not agree to the change, you must immediately stop using the Services. If you continue to use the Mexo Services, you accept and are willing to comply with the modified agreements and rules.

IV. Derivatives Trading Services

4.1 Service content

Through the Derivatives Trading Platform and other services provided by Mexo and its affiliates, users can buy and sell Derivative Products among themselves (peer to peer). Derivative Products can be traded by market participants based on leverage without owning or holding an Asset or Digital Token.

4.2 Service Costs

Your expenses, as well as all hardware, software, services, and other costs incurred in the use of the Derivatives Trading Services, are borne by You, independently and exclusively.

When you use the Derivatives Trading Services, Mexo is entitled to charge you a fee according to the Fee Schedule published on the Site. Mexo has the right to make and adjust service charges, according to the Fee Schedule that appears in Mexo.

Unless both parties indicate or agree otherwise, you accept that Mexo has the right to deduct at any time the commission or service charge directly from your Assets that you have deposited in Mexo Wallets.

4.3 Changes, interruptions, termination restrictions, freezing and unfreezing of the Derivatives Trading Services.

In the event of special circumstances, Mexo will have the right to make changes to the content of the Derivatives Trading Services and may also interrupt, suspend, or terminate such services.

4.3.1 Change in the Derivatives Market Service.

Mexo reserves the right to make changes to the content of these Policies, the Fee Schedule, and/or other terms of service and operating rules issued by Mexo at any time. Mexo will post a notice in a visible position within the Site, and it will take effect immediately. If you continue to use the Mexo Services, it is considered that you accept the change of the content published by Mexo. If you disagree with the modified content, you have the right to stop using the Mexo Services.

4.3.2 Interruption or termination of the Derivatives Market Service.

Mexo reserves the right to terminate all Derivatives Trading Services per these Policies, and these will end on the termination date of all Mexo Service.

By terminating these Policies or the Mexo User Agreement, you lose the right to require Mexo to continue to provide you with any services or to perform any other obligation, including, but not limited to, requiring Mexo to retain or disclose any information in your original account to you or any third party, including information that you have not read or submitted. Termination of this Agreement will not affect the breach of contract by the Party in breach.

In the event of any of the following circumstances occurring, Mexo reserves the right to discontinue or terminate the Derivatives Market Services provided to it, without prior notice:

(a) If your personal information is false or inconsistent with the information at the time of registration, and you do not provide reasonable evidence of such information;

(b) If you violate the relevant laws and regulations applicable to the Derivatives Trading Services or any of the terms and conditions under these Policies;

(c) If you try to gain unauthorized access to the Site or through the account of another User or help others who try to do so;

(d) If you use the Mexo Services to carry out illegal activities such as money laundering, illegal gambling operations, financing of terrorism or other criminal activities;

(e) due to the requirements of financial regulatory authorities, Financial Intelligence Units, or criminal, political and legal departments;

(f) for security reasons or other circumstances considered relevant by Mexo; or

(g) for any other reason established in these Policies.

After the interruption or termination of the Derivatives Trading Services, you must independently and fully bear any costs, disputes, or losses arising from any of the operations carried out before the suspension or termination of the Service and will ensure that Mexo is free of any consequences or costs incurred. As a consequence of the interruption or termination, Mexo may, at any time, cancel any offer or pending purchase or sale order that has not yet been executed.

V. Rules of the Derivatives Trading Platform

The Derivatives Trading Platform is a commercial environment for the purchase and sale of Perpetual Contracts. A perpetual contract is a derivative product that is settled in USDT tokens (tethers). Derivative Products trading can be done with or without leverage. The available leverage ranges from 1x to 100x.

Unlike futures contracts, perpetual contracts have no delivery date and never expire. As they do not have a delivery date, a financing mechanism is used to ensure that the prices of the Perpetual Contracts are anchored to the spot market price (Spot Trading Market).

Mexo does not buy, sell, or trade any Derivative Products on its behalf. The Services provided are only so that Users can exchange Derivative Products with each other.

The Derivatives Market will not be allowed when prohibited by applicable laws. Also, any Sanctioned and ineligible Person is strictly forbidden from maintaining, possessing, or directly or indirectly operating Derivative Products through the Site.

If you use the Derivatives Trading Platform, you are obliged to comply with the Mexo Rules, including these Policies.

5.1 Characteristics of Perpetual Contracts.

(a) Underlying Assets: Value index of a Digital Asset or Digital Token against another Digital Asset or Digital Token.

(b) Index: means the weighted price of a Digital Asset or Digital Token set at its spot value in the market, according to the calculation rules indicated in section B) .3.

(c) Expiration Date: The contracts do not have an expiration date. As long as the User's position remains open, the contract will remain valid.

(d) Minimum Margin (MM): It is the minimum amount that a user needs to keep its position open. When this requirement for the availability of funds is breached, a self-leverage or liquidation process will be initiated.

The larger the position, the higher the amount of funds available in the MM, and the less leverage that can be established.

(e) Daily settlement period: Every 8 (eight) hours precisely at the following times: 07:00, 15:00, and 23:00 UTC-5.

(f) Financing: It is the instrument used to set the price of the perpetual contract at the spot market price.

(g) Risk Limit: It is the limit chosen by the User to reduce the risk of breach of an operation. Users may adjust their risk limit in terms of these Terms and Conditions.

(h) Insurance Fund: It is a mechanism that serves to reduce the risk posed by users who have a negative position value when they are settled in a leveraged transaction.

(i) Auto-Deleverage Mechanism (ADM). It is the instrument through which the market protects positions that cannot be executed at the settlement price in the market (this means that there are not enough orders in the book), and the Insurance Fund is insufficient to cover the loss of this position.

(j) Financing rate. It is the main instrument to set the price of the perpetual contract at the spot price.

5.2 Negotiation Mechanics.

5.2.1 Ticker symbol.

Perpetual contracts will be identified with a symbol or ticker that will be integrated by the expression of the value of the Underlying Index. The following table shows some examples:

5.2.2 Quotation unit price

In perpetual contracts, the listing unit it is the Index.

5.2.3 Index calculation.

To ensure that the spot index price accurately reflects the spot market price of each token, we have carefully selected the market prices of 3 or more Exchanges to determine the weighted average of the index value of each Token or Digital Asset. Measures are introduced to handle abnormal situations.

If a data source stops updating or is idle for a long time, it will be temporarily removed from the calculation until the exchange starts updating the data again.

If the number of sources comes from three or more exchanges, the Index weighted average price of these active exchange prices will be taken (if the price of an exchange deviates 3% or more from the average of all exchanges, then the price of this exchange will be the average *1,03 or the average * 0,97)

If the number comes only from two exchanges, the average of the prices of both platforms will be taken.

If the data source is only one exchange, the trading price on that platform will be taken as the basis.

For the XXX/BTC trading pairs in the index components, it will be multiplied by the Mexo BTC index and calculated.

Mexo reserves the right at any time to readjust the methodology used to calculate the Index. For these purposes, Mexo will keep updated on the Site the method that will be used to calculate the price of the Index.

5.3 Orders, Operations, and Commissions.

An Operation is a purchase or sale of a Perpetual Contract within the Derivatives Trading Platform.

An order is created when you enter an instruction to place a trade using the Derivatives Trading Platform. There are the following types of orders:

(a) Limit: Order with a set price and quantity;

(b) Market: Order with the best available price in the order book.

(c) Opponent Price: is the order that considers opening or closing a position at the best opponent price. That is, if you open long (buy), the price of your order will be the best available opponent price (first request price).

(d) Queue Price: is the order that considers opening or closing a position at the best price on the same side, that is, if you open long (buy), the price of your order will be the best price available on the same side (first offer price)

(e) Over price: is that order that considers opening or closing the position with (the best price of the opponent plus fluctuation), that is, if you open a long (buy), the price of your order will be the best price of the opponent (first sale price) plus fluctuation.

The User can select the order of their preference in the section to open or close position.

When you place a new order through the Derivatives Trading Platform, you expressly authorize Mexo to execute a Trade under this instruction promptly and to charge you any applicable commission per the Fee Schedule published on the Site. For this purpose, you expressly authorize Mexo to deduct such costs from your Mexo Wallet.

For an operation to be valid, the User must have sufficient funds to complete the transaction. Mexo can cancel the order entirely or fill the order partially up to the number of contracts that can be acquired with the Digital Tokens available in the Mexo Derivatives Wallet.

Mexo reserves the right to add, modify, or delete the types of orders that Users can use on the platform at all times. Mexo will keep on the Site, in the Help Center, the explanation of the functionalities of each type of order.

Before using any type of order, the User must fully understand its functionality. Mexo, at no time, recommends the User to use any kind of order. Consequently, the User releases Mexo from any loss or damage that may be suffered in its assets derived from the improper or inappropriate use of any order.

Mexo recommends that before using the Derivatives Trading Platform, use the "paper trading" section, where the User can understand the functionality of the platform and each of the orders, without assuming any risk to their assets.

5.3.1 Order Management.

In the Order History section, the User will be able to see all their positions. Open positions may be canceled by users before being executed.

5.4 Risk Limits.

Users will choose their Risk Limit; however, when the MM is insufficient to leverage their position, the Risk Limit will be automatically decreased (partial position closure and lower MM rate), since users have more open positions and, consequently, a higher amount of leverage due to not being able to liquidate the total number of its positions fully.

If the size of one or more open positions of the users is higher than the Risk Limit, your order will not be processed.

The User may, at any time, adjust their Risk Limit; however, if the User's MM does not meet the requirement for the Risk Limit level, they will not be able to change it.

Risk Limits are as follows:

Mexo reserves the right at any time to readjust the risk limits. For these purposes, Mexo will keep updated on the Site the method that will be used to calculate the risk limit.

5.5 Margin and Leverage

5.5.1 Margin and Leverage

Margin is a good faith deposit or an amount of capital that one needs to place or deposit to hold the position.

Position margin = Initial margin + added/removed margin

Where:

Initial margin = multiplier * quantity * price/leverage

Leverage allows traders to enter a position that is worth much more by committing only a small amount of money. The gain or loss is, therefore, greatly magnified. THE USER SHOULD BE CAREFUL WHEN CHOOSING THE MARGIN SIZE THEY WISH TO USE AND SHOULD BE AVOIDED IF IT YOU HAVE LOW TOLERANCE TO RISK.

Higher leverage indicates higher returns but also higher risks that can lead to the loss of all your capital. BY USING ANY KIND OF LEVERAGE, YOU ACCEPT AND ACKNOWLEDGE THE HIGH RISK INVOLVED IN USING HIGH LEVERAGE.

5.5.2 Initial margin, maintenance margin and margin rate

(a) Initial Margin Rate: It is calculated by dividing one by the leverage that the User chose to open a position.

Initial margin = Contract Multiplier * Quantity * Average Open Price / Leverage

(b) Maintenance Margin Rate (MMR): Minimum margin rate used to maintain the current position. A different maintenance margin rate can result in a different liquidation price. If the underlying index price reaches the liquidation price, the deleverage/liquidation procedure will be triggered.

The MMR is used to calculate the liquidation price

Settlement Price Estimate (Long) = (Position (number of contracts) * Contract Multiplier * Average Open Price - Initial Margin) // ((1-MMR) * Contract Multiplier * Position Size)

Settlement Price Estimate (Short) = (Position Size (number of contracts) * Contract Multiplier * Average Open Price + Initial Margin) // ((1 + MMR) * Contract Multiplier * Position Size)

Margin Rate = (Initial Margin + Unrealized PnL) / Position Value = (Initial Margin + Unrealized PnL) / (Position * Contract Multiplier * Average Price)

5.6 Calculation of profits or losses.

5.6.1 Realized profit and loss (Realized profit and RPL)

The realized profit/loss generated by closing a position before delivery or liquidation is calculated the following way:

Long Side: RPL = (Nominal value/average opening price - nominal value/average closing price) * number of contracts closed

Short Side: RPL = (Nominal value/average closing price - nominal value/average opening price) * number of contracts closed

5.6.2 Unrealized Profit and loss

Unrealized gain/loss generated by a position that has not yet been closed is calculated the following way:

Long side: PnL = (Nominal value/average opening price - nominal value/last contract price) * number of closed contracts

Short side: PnL = (Nominal value/last contract price - nominal value/average opening price) * number of closed contracts

5.7 Auto-Deleverage Mechanism (ADL)

When a user's position is being liquidated, the system takes over the User's remaining position. If the position cannot be executed at the market liquidation price (that is, there are not enough orders in the book) and the insurance fund is insufficient to cover the loss of this position, the auto-deleverage mechanism (ADL) will kick in. ADL will deleverage and close user positions against user positions in the opposite direction or on the opposite side, according to the following formula:

Ranking

= PNL percentage * Effective leverage (if PNL percentage > 0)

= PNL percentage / Effective leverage (if PNL percentage is < 0)

Where:

PNL Percentage =（Unrealized Gains and Losses) / (Cumulative Open Value +/- Margin Added/Removed)

Cumulative Open Value = Amount of Contracts * Average Open Price * Contract Multiplier

= PNL percentage * Effective leverage (if UPL percentage > 0)

The auto-deleverage mechanism will prioritize deleveraging users with high leverage and high profits. Since this mechanism is realized by closing positions, therefore, gains can be transferred at any time.

By accepting these Policies, you acknowledge that you have understood and agreed on how the Auto-Deleverage Mechanism works and the consequences it can have on your profits, losses, and position. If you have any questions, please contact Mexo. Otherwise, stop using the Derivatives Trading Services immediately.

5.8 Settlement of the Perpetual Contract.

Perpetual Contracts are settled daily at 07:00, 15:00, and 23:00 (UTC-5). At the designated time, the funding will be exchanged between the long and short parties, and the settlement will be completed.

Once settled, the PnL of the User made will be readjusted, and his previous PnL will become RPL.

The system will calculate the funding amount, and this will be exchanged between the two parties participating in the trade. The users will be able to see the changes in their balance.

In the case of suspicions of a significant movement of the Index induced by market manipulation or abnormality, Mexo may extend or advance the settlement time.

Mexo reserves the right, at all times, to modify the settlement hours without prior notification to the User. The User is responsible for checking the current financing and settlement hours on the Site.

5.9 Financing Rate.

The primary mechanism for tying the perpetual contract price to the spot price is funding. Funding occurs every 8 hours at 04:00, 12:00, and 20:00 (SGP time). the User will only pay or receive funding if they hold a position during one of these hours. If you close your position before the funding exchange, then you will not pay or receive funds.

5.9.1 Calculation of the Financing Rate.[1]

Funding equals the value of the position times the funding rate. When the financing rate is positive, longs pay short. Vice versa, if it is negative.

Financing Rate Estimate = Clamp (MA (((Best Bid + Best Ask) / 2 - Spot Price Index) / Spot Price-Interest), a, b)

The funding rate is updated every minute. The Funding Rate Estimate is calculated at 4:00 a.m., 12:00 a.m., and 8:00 p.m. (SGP Time, UTC + 8) and will be used for funding exchange.

5.9.2 Actual Funding Fee.

When funding occurs, we prioritize that the fee is collected from each User's balance. If the balance is insufficient, the remaining amount will be deducted from the User's position margin. The funding fee will continue to be charged until the User's maintenance margin rate equals the minimum, then the rest will be ignored.

The amount of funding fee that the User can receive also depends on the money collected from the opposite side.

The platform does not charge any fees on funding; it is exchanged directly between traders.

5.10 Counterparty and market makers

In general, other Mexo Users will act as counterparties during a trade. However, from time to time, Mexo may choose to act as principal, counterparty, or market-maker in trades carried out on the Derivatives Trading Platform or to contract third parties to do so.

Every time Mexo or contracted third parties carry out trades on the Site or use the Derivatives Trading Services, their Orders, Operations, and Trades will be treated in the same way as the Orders, Operations, and Trades of other Mexo Users.

5.11 Fair play practices

To offer a free and fair market for users of the Derivatives Trading Platform, Mexo may impose actions to prevent, detect, address, and restrict market manipulation practices through the Site.

If Mexo detects that you are engaging in any of these practices, Mexo may cancel your account immediately, freeze your funds in your Mexo Wallet and notify the corresponding legal authorities so that they can take the relevant legal actions.

VI. Effectiveness, interpretation, alteration, and termination of the Policies.

These Policies are effective immediately on the date of publication. When you click the accept button, it becomes legally binding on You and Mexo when you use the Derivatives Trading Services.

Mexo reserves the right to make changes to the content of this Policy, the list of Exchanges listed to perform the calculation of the Index and/or others referred to herein at any time. Mexo will post a notice in a visible position within the Site, and it will take effect immediately. If you continue to use the Mexo Services, it is considered that you accept the change of the content published by Mexo. If you disagree with the modified content, you have the right to stop using the Mexo Services.

VII. Extraordinary Events.

7.1 Fortuitous events or causes of force majeure.

When due to fortuitous events or force majeure, it is impossible to continue operations, Mexo may close or cancel the positions of the Users and will be empowered to determine the form of liquidation, in any case trying to safeguard the rights and interests of the Users.

7.2 Contingency situations.

If Mexo declares a contingency situation, the settlement and financing schedules may be modified, as well as the operation mechanisms per these Policies and the Mexo User Agreement.

VIII. Law enforcement, dispute resolution, arbitration and class action waiver, and others

All the provisions of the Mexo User Agreement that by reference, the parties expressly accept by accepting these policies are applicable for the determination of the applicable law and the dispute resolution agreement.

IX. Miscellaneous

The Parties agree to the following general terms:

9.1 Severability. If any part, term, or provision of these Policies is deemed void, illegal, unenforceable, or in conflict with any applicable law or jurisdiction, the validity of this Agreement will not be affected by it, except to the extent that such provision will be held void, illegal or otherwise unenforceable.

9.2 Force majeure. Mexo will have no responsibility or liability for any failure or delay in the performance of any of the Derivatives Trading Services, or any loss or damage that may be incurred, due to any circumstance or event beyond the control of Mexo or any of its Affiliates, including but not limited to extraordinary weather conditions, earthquakes, acts of God, war, fires, revolts, labor disputes, riots, accidents, government actions, power failures, hacking, equipment failure or software malfunction.

9.3 Headings. The titles and subtitles contained in these Policies are for convenience only. They shall not be deemed to control or affect the meaning or construction of any provision of these Policies.

9.4 Assignment. The User may not assign or transfer any right to use the Services or any of their rights or obligations under these Policies without the prior consent of Mexo. Mexo may assign or transfer any or all of your rights or obligations under these Policies, in whole or in part, without prior notice or obtaining your consent or approval.

9.5 Notices. All communications, requirements, announcements, and specific notifications that Mexo will send or make specifically concerning these Policies will be sent by e-mail to the e-mail address established by you during your registration. Any e-mail change shall be notified in advance to Mexo to become effective.

9.6 Waiver. The failure of Mexo at any time to require performance by you of any provision hereof shall not affect Mexo's right to request performance at any time thereafter, nor shall Mexo's waiver of Mexo of a breach of any provision hereof be taken or held to be a waiver of a provision itself.

9.7 Previous Policies and Modifications. These Policies contain the complete understanding between the Parties. The Parties agree to comply with the terms and conditions established in this document, replacing and nullifying any agreement or oral or written negotiation that has been previously entered into.

X. Agreement

You, the Mexo user (including individual and institutional users), acknowledge and agree to the following:

1. You have the legal status necessary to carry out the corresponding activities carried out within the Site, as well as to contract the Derivatives Trading Services, and there are no legal or administrative provisions that prohibit or restrict your participation in the Site.

2. All documents and information provided by you are accurate, comprehensive, valid, and lawful, and the legal sources of funds used within the Site are licit.

3. You undertake to consciously abide by the laws, regulations, rules and regulations, and regulatory documents relating to Mexo.

4. You accept the possibility of Mexo to share your information in cases where it is required to comply with the obligations related to the prevention of money laundering or terrorist financing in the term of the applicable AML and CTF provisions and any related law without the foregoing implying a violation of the obligation of confidentiality, or constituting violations of the disclosure restrictions established in our privacy policy.

5. You agree to have a good understanding of the rules, practices, and knowledge for trading Derivatives Products, and you are fully aware of the risk of loss and return involved in the investment process.

6. You have committed to fully understand the meaning of "self-trading and financing," knowing there is also the possibility of loss. In that case, you will be the sole responsible for the results, whether they are profits or losses, and hereby release Mexo from any responsibility or liability in connection with such gains or losses.

7. You accept the Site as a valid way to be notified of any notice, change, or modification related to the Mexo Services, and/or the Mexo Rules through the Site. Therefore you assume the responsibility of regularly accessing the Site to review any notification and/or announcement that is published there.

8. You agree that for any particular matter related to the provision of the Mexo Services only between Mexo and you to be notified through the e-mail that was provided at the time of registering on the platform, or through the e-mail that is subsequently provided to Mexo. Said notification will be considered valid with the sole fact that Mexo can prove that the e-mail left Mexo's servers.

9. You acknowledge and assume any risk arising from the use of the Mexo Services, the Site, and the Mexo Derivatives Trading Platform.

10. You confirm your agreement and acceptance of the relevant electronic contract or instrument in the process of establishing the trading system, service system, and other business systems on the computer, electronic terminal, and network, and then sign the corresponding contract with Mexo. The signature electronict contract shall have the same legal effect and shall not require the signature of a paper contract or instrument.

11. You will be solely responsible for maintaining and safeguarding the password that allows you access to the Mexo Derivatives Trading Platform, the crypto-asset exchange system, and other Mexo trading systems. All operations after verification of your identity that are made with the said password will be considered yours. You, and you alone, will bear all the resulting legal consequences.

[1] * Actual interest rate = 0

* For Perpetual Contracts: a and b are the limit values (currently it is +/- 0.003). MA is the abbreviation for Moving Average.

(Prior Mexo)