What Is 'Funding Rate' — the Fee Longs and Shorts Exchange on Perps
What the funding rate is in perpetual futures, and what positive vs. negative funding means — explained neutrally.
The funding rate is a fee that long and short holders periodically pay each other (usually every 8 hours) on perpetual futures (perps), which have no expiry — it keeps the perp price tethered to the spot price.
When funding is positive, longs pay shorts. This is often read as a sign that up-bets (longs) are crowded and the perp trades above spot. When it's negative, shorts pay longs, read as down-bets being dominant.
Funding accrues the longer you hold, affecting PnL. Even if your direction is right, constantly paying funding erodes profit; conversely, the side receiving funding accumulates a little just by holding.
Whale Story shows market-context indicators like funding, open interest (OI), and long/short ratio for major coins. These are reference information for observing market state and do not predict future prices.
FAQ
Does high funding mean price will rise?
No. Funding reflects the current crowding of positions — it does not guarantee future price direction.
When is funding settled?
It varies by exchange but is usually settled every 8 hours; whoever holds the position at settlement pays or receives.