MEXC fair price reverse-engineered on BTC: an advanced mark vs last walkthrough from live numbers

Solving it is the quickest way to see why last and fair drift apart.

Advanced tier. MEXC calls its mark price the fair price.

The formula

Fair price = median of (funding premium, mid-price basis fair price, last price). Funding premium = index x [1 + funding rate x (hours to next funding / funding interval hours)]. Mid-price basis fair price = index + moving average of [(best bid + best ask)/2 - index].

Leg 1: funding premium

77,852.4 x (1 + 0.0001 x 3/8) = 77,852.4 x 1.0000375 = 77,855.32.

Leg 2: last price

77,826.9.

Leg 3: the basis leg, inferred

MEXC does not print this leg on its own, but you can back it out. The fair price, 77,828.4, matches neither 77,855.32 nor 77,826.9. In a median of three, the answer has to be one of the inputs, so 77,828.4 is the basis leg. That puts the moving-average basis at 77,828.4 - 77,852.4 = -24.0, a discount of about 0.031% to index.

Reading it: the BTC perp book had been sitting below spot long enough for the smoothed basis to show it, and the latest trade was a touch below even that.

Worked example: liquidation distance from fair, not from last

MEXC's BTC_USDT contract detail lists a contract size of 0.0001 BTC, max leverage 500x, a first-tier maintenance rate of 0.1% and a 0.02% taker fee. Long 0.5 BTC (5,000 contracts) at 77,826.9, 25x isolated. Notional = 38,913.45. Margin = 1,556.54. Simplified liquidation before fees = 77,826.9 x (1 - 1/25 + 0.001) = 77,826.9 x 0.961 = 74,791.65. Distance from fair = 77,828.4 - 74,791.65 = 3,036.75, about 3.90%. Taker fee to open = 38,913.45 x 0.0002 = 7.78 USDT, which pulls the real line slightly closer. Your position panel's estimate is the authority.

What a wick does to the median (illustrative)

Say one market sell prints last at 76,000. The funding leg and the basis leg are both tied to index, which barely moved, so the median stays near 77,8xx. A stop triggered on last at 76,500 fires. The same stop triggered on fair price does not. If instead the index falls 3% because spot sells off everywhere, both index-based legs fall with it and fair price follows. Fair price filters venue-specific noise, not real moves.

Two MEXC settings that change the outcome

Trigger type: MEXC trigger orders can fire on last, fair or index price. Reaching the trigger only activates the order; it then goes to the book at the price you set. Price protection: when enabled, a TP/SL that hits its trigger is rejected if the last-to-fair gap is beyond that contract's threshold. It blocks wick exits, and it can also block an exit in a dislocated market, so know which one you want.

The contract also showed a max bid of 85,637.6 and a min ask of 70,067.1, which works out to index plus and minus 10%. That is the order price band for the contract at that moment.

Common mistakes

• Watching last-price candles to judge liquidation risk instead of switching the chart to fair price.
• Reading a small unrealized loss right after a fill as money lost. Fair and fill differ; realized PnL is unaffected.
• Setting stops on last for thin alts, where single prints are common.
• Turning on price protection without realizing it can reject a stop.

Quick FAQ

Q: Can last touch my liquidation price without liquidating me? A: Yes. Liquidation runs on fair price; a brief last-price touch does not trigger it while fair stays clear.

Q: Do other pairs show the same discount? A: At the same time ETH_USDT read last 2,289.37, fair 2,289.38, index 2,290.5; SOL_USDT read 93.56 on all three; DOGE_USDT read last 0.07525, fair 0.07526, index 0.07528.

Cashtags for the pairs above: BTC, ETH, SOL, DOGE, plus XRP if you want a fifth to practice on.

The takeaway: fair price is the middle of three numbers, and when you know which leg is in the middle, you know what can and cannot liquidate you.