Explainer
How Perpetual Funding Rates Work
Funding is the regular payment between the longs and shorts of a perpetual futures contract that pulls its price back towards the spot price. When the perp trades above the index, longs pay shorts; when it trades below, shorts pay longs. On most venues the exchange takes no cut.
Most venues copy Binance's formula, an average premium plus an interest term of 0.01% every 8 hours, but onchain venues pay at different intervals, from every hour to continuously, with different caps. Compare rates only after converting them to the same period.
How the funding rate is calculated
Binance's formula, which most venues start from (Binance):
- Premium: how far the perp trades above or below the spot index, measured from the prices at which a set order size would fill, sampled every few seconds and averaged over the funding period.
- Interest: 0.01% every 8 hours, standing in for the difference in borrowing costs between the two currencies. The rate is the premium plus the interest term, with the gap between them clamped to 0.05%.
- Payment: position size times the rate, paid only by positions open at the funding time. Hyperliquid values the position at the oracle price (docs), Aster at the mark price.
- Caps: each venue limits how far the rate can move in one period, so in a squeeze the price gap can outrun funding.
How onchain perp DEXs set funding
| Venue | Paid | Cap | How it differs |
|---|---|---|---|
| Hyperliquid | Every hour | 0.5% an hour | Binance-style premium sampled every 5 seconds; paid on the oracle price, not the mark |
| Lighter | Every hour | 4% per 8 hours on most markets | Premium sampled 60 times an hour at random; scaled down for RWA and pre-IPO markets |
| Aster | 1 to 8 hours, by market | Per market: 0.3% for BTC and ETH | Binance-style; docs say 8 hours by default, but most live markets pay every 4 or 8 hours |
| dYdX | Every hour | 12% per 8 hours on large caps | Validators vote the premium each block; no interest term on cross-margin markets |
| Paradex | Continuous | Per 8 hours: 2% BTC, ETH, SOL; 0.5% TradFi; 5% others | Premium is a weighted median across six venues, including Binance and Hyperliquid, then smoothed |
| Variational | 1 to 8 hours, by market | 2% an hour | Copies Bybit's interval, else Binance's, else one hour; prices from RFQ quotes |
| GMX | Continuous | Per market | Rate follows the imbalance between long and short open interest, not a premium, plus a separate borrow fee |
| edgeX | Every hour, per its docs | Not stated | Interest term is the gap between quote and base borrow rates, not a fixed 0.01% |
From each venue's docs, read 13 November 2026; Aster from its live market list, which put 361 markets on 4 hours, 331 on 8 hours and 104 on 1 hour. Fees and funding intervals for more venues are in Castle's perp DEX rankings.
How to compare funding across venues
Convert every rate to the same period before comparing: a rate paid every hour and one paid every 8 hours are not the same size. Castle annualises without compounding: the hourly rate times 24 times 365.
Venues do not all do this. Hyperliquid's docs call the 0.01%-per-8-hours baseline an 11.6% annual rate, which compounds it every hour; without compounding the same baseline is 10.95% a year. Check which convention a dashboard uses before comparing it with another.
What funding rates tell you
- Positioning. Positive funding means longs are paying to stay long: the market leans long.
- The cost of holding a position. Funding, not the trading fee, is most of the cost of holding a perp for weeks. In Castle's September 2026 data, BTC funding ran at 1.9% to 7.6% a year on every venue tested, and holding a long on a pre-IPO perp cost from about 1% to 33% a year depending on the venue.
- Carry. A BIS working paper found the crypto carry, the return from being short perps against spot, averaged above 10% a year, and that high carry predicts crashes.
- Delta-neutral yield. Ethena's USDe holds spot and shorts perps to earn funding; its docs put BTC and ETH funding at 7.8% to 9% a year over the three years to December 2024.
Where to get funding rate data
Free, from the venues' own public APIs, no key needed:
- Hyperliquid's
predictedFundingsrequest, which also returns Binance's and Bybit's rates for the same coins (docs) - Lighter's funding-rates endpoint, which covers Lighter, Binance, Bybit and Hyperliquid
- dYdX's historicalFunding, Aster's fundingRate and Paradex's funding data
Dune has a curated hourly Hyperliquid table with funding back to September 2025 (Dune). CoinGlass, Velo, Laevitas and Kaiko sell cross-venue funding data on paid plans, and DefiLlama's funding endpoint is paid too.
Questions
- How often is funding paid on Hyperliquid?
- Every hour, at one eighth of the 8-hour rate, capped at 0.5% an hour. Hyperliquid values each position at the oracle price for the payment, not the mark price. HIP-3 markets use their own funding settings, set by each deployer.
- Who publishes perp DEX funding rate data?
- The venues themselves, free: Hyperliquid's predictedFundings request returns its own, Binance's and Bybit's rates; Lighter's funding-rates endpoint covers Lighter, Binance, Bybit and Hyperliquid; dYdX, Aster and Paradex publish theirs. Dune has a free curated Hyperliquid table. CoinGlass, Velo, Laevitas and Kaiko sell cross-venue data on paid plans.
- Why do funding rates differ between exchanges?
- Each venue measures its own premium against its own index, pays at its own interval and caps the rate differently. Positioning also differs: a venue where traders lean long pays more to shorts. Paradex smooths its premium across six venues, and GMX sets funding from the imbalance of open interest rather than a price premium.
- How do you annualise a funding rate?
- Multiply the rate by the number of funding periods in a year: an hourly rate times 8,760, or an 8-hour rate times 1,095. That gives 10.95% a year for the standard 0.01% every 8 hours. Hyperliquid quotes the same baseline as 11.6%, because it compounds every hour, so check the convention before comparing venues.