Skip to main content

Funding Rates

What is a Funding Rate​

A Funding Rate is a periodic payment between holders of long and short positions in perpetual futures markets.

The mechanism keeps the futures price close to the spot price of the underlying asset.

Formula​

Payment = Position Size × Funding Rate
  • If the rate is positive → longs pay shorts
  • If the rate is negative → shorts pay longs

Payment Intervals​

ExchangeInterval
ParadexContinuous (every second)
HyperliquidEvery hour
LighterEvery hour
OmniEvery 8 hours

APR (Annual Percentage Rate)​

CexDex displays rates in APR format — annualized return.

APR = Funding Rate per period × Number of periods per year × 100%

Example for Hyperliquid (hourly funding):

APR = Hourly Rate × 8760 × 100%

Spread​

The spread is the difference in APR between two exchanges for the same instrument.

The spread determines the profitability of the arbitrage strategy.