Funding Rate

Funding rates help keep the price of a perpetual futures contract aligned with the asset’s reference (oracle) price.

Once per hour, traders on one side of the market (either longs or shorts) pay a small fee to the other side, based on where the perp is trading relative to the oracle:

• If the perp trades above the oracle price, longs pay shorts.

• If the perp trades below the oracle price, shorts pay longs.

These payments flow directly between traders — Perps⁻¹ does not take a fee — and they create an economic incentive for traders to push the perp price back toward the underlying reference price.