JoymistaWhat Is the Funding Rate in Crypto Futures?
The funding rate is a periodic payment between longs and shorts on perpetual futures that keeps the contract price close to the spot price.
Explained
When the rate is positive, longs pay shorts; when negative, the reverse. Many exchanges charge it every 8 hours, but that varies by exchange and contract. A very high rate shows one side is crowded.
Example
Example with made-up numbersA 10,000-dollar long with a funding rate of +0.01% pays 10,000 × 0.0001 = 1 dollar for that period.
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Open in JoymistaEducational content, not investment advice.