Funding
Last updated: Mar 11, 2026
What is funding?
Perpetual futures use funding to keep prices in line with the spot market. Funding is a recurring payment between longs and shorts based on the difference between the perp's mark price and the index price of the underlying asset.
- Funding accrues and is paid every hour, but is displayed as an annualized 8-hour rate for consistency with industry standards.
- Positive funding means longs pay shorts.
- Negative funding means shorts pay longs.
Funding rate formula
The funding rate is driven by the premium between the perpetual's mark price and the index price.
premium = (mark_price - index_price) / index_price
funding_rate = clamp(premium × funding_rate_factor, floor, cap)These rates are shown as annualized 8-hour rates in the UI, even though funding accrues hourly.
Worked example
A trader opens a $20,000 BTC long while the displayed funding rate is +0.01% per 8 hours.
That corresponds to +0.00125% per hour.
Funding = $20,000 × 0.0000125 = $0.25 per hourIf the rate stays constant for 24 hours, the trader pays $0.25 × 24 = $6 total, equivalent to three 8-hour periods at the same displayed rate.
Funding Caps and Impact Prices
| Market | Funding Cap/Floor (per 8h) | Funding Rate Impact Price |
|---|---|---|
| BTC, ETH | +/-2.00% | 20,000 USDT |
| SOL | +/-4.00% | 10,000 USDT |
Settlement
Funding accrues continuously and is applied automatically to your subaccount balance. You do not need to take any action to settle it.
Funding payments appear in your position and account history, so even a flat trade can still produce a positive or negative net outcome because of funding.
Impact on your position
Funding is separate from trading PnL, but it affects your net return on a trade. For long-duration positions in high-funding environments, funding can materially erode, or improve, your total result.
Funding over 24 hours
- 0.5 BTC long at $100,000 = $50,000 notional
- Funding rate: +0.1% per 8-hour period
- Held for 24 hours = 3 funding periods
Total funding paid = $50,000 × 0.001 × 3 = $150Even if the position is flat when you close it, you would still be down $150 in funding paid.
Practical notes
Avoiding high-funding periods: If you intend to hold a long position, check the current funding rate before entry. Very high positive funding makes long positions more expensive to hold over time.
Funding arbitrage: When funding is persistently high, some traders open the opposite side of the market primarily to collect funding. This still carries price risk and is not risk-free.