Funding Rate
Last updated 17 October 2026Last verified 17 October 2026
What is the funding rate in crypto?
A periodic payment between long and short holders on perpetual futures, calibrated to keep the perp price anchored to spot. When the market is net long, longs pay shorts; when net short, shorts pay longs. Funding rates are quoted as an hourly or 8-hour rate and serve as a direct sentiment signal. In sustained bull markets, annualized funding rates can exceed 100%, making long perpetual positions expensive to carry.
TradFi equivalentThe financing leg of a total return swap. A perpetual gives spot exposure with no expiry, and funding is the floating rate paid periodically to hold it, doing the job carry does inside a dated future's basis. The difference is that funding is a cash transfer between longs and shorts, so it moves with positioning rather than with rates.