Funding Rate

A funding rate is a periodic payment exchanged directly between traders holding long and short positions on a perpetual futures contract — not a fee paid to the platform. When the perpetual’s price trades above the underlying spot price, longs pay shorts; when it trades below, shorts pay longs. That payment pressure is what keeps a perpetual contract’s price tethered to spot, since a perpetual has no expiry date to force convergence the way a traditional dated futures contract does.

Funding is typically calculated and exchanged on a fixed interval (commonly hourly on Solana perps venues), and the rate itself floats based on how far the perpetual’s price has drifted from spot and how imbalanced long versus short demand is. A consistently positive funding rate means longs are paying shorts — a signal the market is leaning bullish enough that longs are willing to pay for that exposure, and vice versa for negative funding.

Some platforms use a different mechanism entirely: pool-to-peer venues like Jupiter Perps replace funding with an hourly borrow rate on the notional you’ve borrowed from the liquidity pool, which rises with pool utilization instead of tracking a long/short imbalance directly. Either way, the cost is real and compounds over time — a position held for weeks can accrue meaningful funding cost even if the underlying price barely moves. See our Perpetuals category page for how funding fits into the broader risk picture, and our Perp DEX Rankings for how individual platforms structure it.