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Crypto Funding Rates: How to Read and Compare Them
Understand how perpetual futures funding works, why rates change, and how to estimate payments before trading.
What is a funding rate?
Perpetual futures have no fixed expiration date. Many exchanges use periodic funding payments between long and short traders to help keep perpetual prices aligned with spot prices. Positive funding generally means longs pay shorts; negative funding generally means shorts pay longs. Exact rules and settlement intervals depend on the exchange and contract.
Estimate a funding payment
Estimated payment = notional × (rate / 100) × number of settlements. Positive result represents a payment from longs to shorts; negative represents the reverse. Assumes unchanged notional and rate.
How to compare funding rates
- Check whether the displayed figure is per funding event or annualized.
- Verify the next settlement time and the contract's actual funding interval.
- Compare the same asset across exchanges, accounting for fees, spread, liquidity, and basis.
- Check whether the rate is likely to persist; a single observation is not a forecast.
Open ArbVexa funding rate monitor to view available exchange data. The live dashboard may be delayed or temporarily unavailable.
Important risks
Funding capture is not risk-free. A hedge can incur trading fees, slippage, basis moves, liquidation risk, collateral risk, and exchange counterparty risk. Funding may change sign before settlement.
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Educational research only; not financial advice. Rates and spreads change, and examples do not guarantee returns.