Funding rates are small payments that move between traders holding long positions and traders holding short positions on a perpetual contract. They keep the perp price aligned with the actual spot price of the asset.
When the perp price is trading above spot, longs pay shorts. When the perp price is trading below spot, shorts pay longs. The direction flips based on market conditions, and that push and pull is what keeps the contract price tracking spot over time.
When funding is paid
Funding pays out every hour. If you have an open position when the hour hits, the payment is settled automatically. On an isolated position it comes out of or goes into that position's margin. On cross margin it moves your shared perps cash balance.
The amount is proportional to your position size, so a larger position means a larger payment, either paid or received. This is why your margin or perps cash balance can change without you placing any trades.
Funding adds up over time
Hourly amounts are small but they add up. A position you hold for days or weeks can build up meaningful funding costs, or meaningful earnings if you are on the receiving side. When you decide whether to keep a position open, weigh the funding rate alongside your profit and loss, not just the price move.
Where to see the rate
The current funding rate for any market is in the About section of its market page, shown as Funding rate (1h). Once you hold a position, its Funding row shows the total you have paid or earned since it opened.
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