The AMM price shifts according to its position. When AMM longs, the AMM price will be lower than the index price, and vice versa when AMM shorts. In other word, the market is out of balance at this point, so the market price will shift relative to the index. In this case, the protocol will charge funding payment from the positions opposite to AMM and the traders with the same position of AMM will also receive the funding payment. AMM always receives funding payment as long as it holds positions. The funding rate is positively correlated with AMM’s position size, i.e. the more position AMM holds, the further away the market price deviates, causing a higher funding payment. Thus,