--- schema: 1 kind: prose_mirror lang: en canonical: https://funding-radar.com/en/what-is-funding --- # What Is a Funding Rate Funding is a periodic payment between long and short holders of a perpetual contract. The exchange neither takes nor gives money: one side pays the other so the perp's price doesn't drift away from spot. The rate is a share of the position per settlement interval: −2% funding on a $1,000 position means $20 changes hands once per interval. ## The formula: normalizing to one hour Exchanges quote the rate PER SETTLEMENT INTERVAL, and intervals differ — from one hour to eight. Raw percentages therefore can't be compared: +0.10% per 1 hour burns four times hotter than +0.10% per 4 hours. The radar normalizes everything to an hourly rate: hourly rate = rate per interval ÷ (interval in hours) The annualized equivalent is hourly rate × 24 × 365. It looks impressive (0.05%/h ≈ 438% APR), but extreme rates never live that long: it's a gauge of imbalance, not a promise of yield. ## The sign: who pays whom - **Positive rate** — The perp trades above spot — longs are crowded. Longs pay, shorts receive. This is the market's normal state in an uptrend: mild positive funding is background, not an event. - **Negative rate** — The perp is below spot — the crowd is short. Shorts pay, longs receive. This is where extremes happen most: −1%/h on a pumped coin means holding a long literally PAYS a percent per hour. - **Extreme rate** — The rate the radar watches for: an imbalance so strong that taking the opposite side pays noticeably more than the entry-exit fees. What to do with it — on the strategies page. ## The cutoff: the moment funding is charged Funding doesn't drip continuously — it's charged at the settlement cutoff. Whoever holds the position AT that exact moment pays or receives in full: enter a minute before the cutoff and you collect the whole rate; exit a minute before and you get nothing. Hence the radar's flagship strategy — settlement sniping: a short entry right under the accrual. The catch is that price moves around cutoffs, differently for every pair: the radar measures that move from its own captures and shows it on the card next to the calculator. Cutoff times align with intervals, so 8-hour pairs settle at 00:00, 08:00 and 16:00 UTC — at those hours the whole market accrues at once. The full schedule with per-hour statistics lives on the schedule page. ## Intervals: from one hour to eight The settlement interval is not an exchange constant — it's a property of the specific pair, and it CHANGES. The base is 8 hours, but exchanges move heated pairs to 4 hours, 2 hours, even 1: the more often you settle, the tighter you hold price to spot. The radar has seen it in its own data: Binance moved DEXE from 4 hours to 1 mid-event. Hyperliquid settles every hour, always — eight cutoffs where others have one. That's why its raw rates look modest yet compare as equals once normalized hourly. How many pairs live on which interval right now — on each exchange's page, computed from the latest poll of the exchanges. ## Where to next - **See live rates** — The home page shows what's burning right now across five exchanges: events, the upcoming-settlements calendar, a scanner of all pairs. https://funding-radar.com/en - **Price a specific trade** — The calculator on a pair's card: net capture after fees and slippage, liquidation price, entry break-even threshold. https://funding-radar.com/en/calculator - **Pick a strategy** — Settlement snipe, cross-exchange hedged pair, carry — mechanics, economics and risks of each. https://funding-radar.com/en/strategies - **Find funding rate arbitrage** — Delta-neutral pairs across exchanges: the spread right now, how long it holds, and how many hours it takes to cover four legs of fees. https://funding-radar.com/en/pairs Live page: https://funding-radar.com/en/what-is-funding Methodology & data verification: https://funding-radar.com/en/methodology