Why perpetuals need funding
A normal futures contract has an expiry date, and on that date its price has to meet the spot price. A perpetual future never expires, so something else has to stop it from drifting away from spot. That something is the funding rate: a regular payment between traders who are long and traders who are short.
When the perpetual trades above the spot index, the rate is positive and longs pay shorts. Holding a long becomes more expensive and holding a short earns income, which pulls the perp price back down. When the perp trades below spot, the rate turns negative and shorts pay longs. The exchange does not keep the payment; it only passes it from one side to the other.
How the rate is calculated
Binance, Bybit and Hyperliquid use the same basic formula: funding = average premium + clamp(interest rate − premium, −0.05%, +0.05%).
- The premium measures how far the perp's order book sits above or below the spot index. Binance uses the impact bid and ask prices (where a set order size would fill); Hyperliquid samples its premium every 5 seconds and averages it over the hour.
- The interest rate is a fixed 0.01% per 8 hours on all three venues (Binance describes it as 0.03% a day).
- The clamp means that while the premium stays within 0.05% of the interest rate, funding is at the baseline of 0.01% in 8-hour terms. On a 4-hour Binance contract, that baseline is 0.005% per payment, shown here as 0.01% per 8 hours. That is why so many coins show that exact number in calm markets: it is the baseline, not a sign of bullishness.
A position pays or receives position value × funding rate at each funding time. A $10,000 long at +0.01% pays $1; at +0.1% it pays $10, every interval.
How often it is paid
Most Binance contracts tracked here settle every 4 hours; major contracts such as BTC and ETH settle every 8 hours, at 00:00, 08:00 and 16:00 UTC. Binance can switch a contract to hourly settlement in extreme markets. Bybit has many contracts on both 4-hour and 8-hour schedules, with some settling hourly. Intervals can change, so check the individual contract's current schedule. Hyperliquid pays every hour, at one eighth of the 8-hour rate, and caps funding at 4% per hour.
Because intervals differ, comparing raw numbers across exchanges is misleading. This site converts every rate to its 8-hour equivalent so the funding rates table compares like with like. The live box above does the same: a Hyperliquid rate shown as 0.0100% per 8 hours corresponds to a quote of 0.00125% per hour, not an already settled payment.
The same coin can also have perpetuals quoted in different currencies on one venue. USDT vs USDC funding compares the current quotes on those matched pairs. Recorded funding quote changes instead compares each contract's quote with its own quote this site recorded 1, 4 or 24 hours earlier. Both show quoted rates, current or recorded observations, not settled payments.
OI-weighted funding
One coin trades on many exchanges, each with its own funding rate. A simple average gives every venue one vote, so a small exchange with a few hundred million dollars of positions counts as much as one holding billions. One thin venue with an extreme rate can drag the average far from what most traders actually pay.
OI-weighted funding weights each venue's rate by its open interest: multiply each 8-hour rate by that venue's open interest in dollars, add the results up and divide by the total open interest. Venues where more money is positioned count for more.
Example: venue A holds $9B of BTC open interest at +0.01% per 8 hours, and venue B holds $1B at +0.10%. The simple average is (0.01% + 0.10%) / 2 = 0.055%. The OI-weighted rate is (0.01% × 9 + 0.10% × 1) / 10 = 0.019%, much closer to what the bulk of positions pay. A large gap between the two figures means a small venue is running hot.
The live box above shows BTC's OI-weighted rate. The OI-weighted funding index applies the same weighting per coin and across the 50 largest coins by open interest, with its history next to the simple average.
From funding rate to APR
To see what a rate costs over time, annualise it: multiply the 8-hour rate by 3 (payments a day) and by 365. The baseline 0.01% per 8 hours is about 11% a year. A rate of 0.1% per 8 hours is about 110% a year, which is expensive enough that longs rarely hold it for long. The highest funding rates and negative funding rates pages show APR next to each rate.
Is negative funding bullish or bearish?
Negative funding means shorts pay longs if that quote settles. It specifies payment direction, not a reliable price forecast. A negative quote can persist while price falls or rises. See the current negative funding rates for contract-level quotes.
A short squeeze requires price and position context, including open interest and forced short closures; negative funding alone does not predict one.
What traders read from it
Crowding. Funding tells you which side is paying to hold its position. Very positive funding means longs are crowded and willing to pay a lot; very negative funding means the same for shorts. Crowded positions are the ones most at risk of a squeeze or a liquidation cascade.
Context with open interest. High funding with rising open interest is leverage still building. High funding with falling OI is longs leaving.
Carry. Some traders hold spot and short the perp to collect positive funding while staying market-neutral. Others take the high-rate side on one exchange and the low-rate side on another. The funding arbitrage page lists the widest gaps between venues. These trades carry real costs: trading fees, the risk that the rate flips, and the risk of liquidation on the short leg if margin runs low.
What is a normal funding rate?
The baseline funding rate on Binance, Bybit and Hyperliquid is 0.01% per 8 hours, about 10.95% a year in simple APR (0.01% × 3 × 365). An elevated rate is some multiple of that baseline: 0.03% per 8 hours is 3 times the baseline, and 0.1% is 10 times.
Live BTC quotes as of 13:31 UTC: Binance BTCUSDT +0.0075% per 8h, 0.75 times the baseline, 8.2% simple APR; Bybit BTCUSDT +0.0053% per 8h, 0.53 times the baseline, 5.8% simple APR; Hyperliquid BTC -0.0037% per 8h, -0.37 times the baseline, -4.0% simple APR; MEXC BTC_USDT +0.0075% per 8h, 0.75 times the baseline, 8.2% simple APR.
A multiple says how far a quote sits from the baseline, not where price goes next. Whether a rate is high for one coin depends on its own history: funding percentiles rank each current quote against that coin's recorded rates, and highest funding rates lists the largest quotes right now.
Hyperliquid vs Binance. Hyperliquid pays every hour, while Binance and Bybit pay at each contract's interval, usually every 4 or 8 hours. A Hyperliquid hourly quote of 0.00125% is the same 0.01% per 8 hours, so compare per-8h equivalents, as the live box does. Hyperliquid funding rates shows every Hyperliquid quote in those terms.
Things that trip people up
- The rate shown before a funding time is usually a prediction that keeps changing until settlement.
- You only pay or receive funding if you hold a position at the funding timestamp.
- Funding is charged on the full position value, not on your margin, so at 10× leverage a 0.1% payment is 1% of your margin.
For live numbers per exchange, see the BTC funding rate page or Hyperliquid funding rates.
Checked against the exchanges' own documentation on 21 October 2026: Binance: introduction to funding rates · Bybit: introduction to funding rate · Hyperliquid docs: funding. Not financial advice.