Question 1

What is a crypto funding rate?

Accepted Answer

A funding rate is a periodic payment between long and short traders in perpetual futures markets. It keeps the futures price close to the spot price. When the rate is positive, longs pay shorts. When negative, shorts pay longs. Payments typically occur every 8 hours.

Question 2

How often do funding rates change?

Accepted Answer

Funding rates are recalculated and settled every 8 hours on most centralized exchanges (Binance, Bybit, OKX). Some decentralized exchanges like dYdX settle every hour, while Hyperliquid settles every 8 hours. The rate fluctuates based on the premium between futures and spot prices.

Question 3

What is funding rate arbitrage?

Accepted Answer

Funding rate arbitrage involves buying an asset on the spot market while simultaneously shorting it on a perpetual futures exchange with a high positive funding rate. You earn the funding payments while staying market-neutral since your spot position hedges price risk. Annualized returns of 10-30% are possible during high-funding periods.

Question 4

What does a high positive funding rate mean?

Accepted Answer

A high positive funding rate (above 0.01% per 8h) indicates bullish market sentiment — more traders are long than short, and they're willing to pay a premium to hold their positions. This can signal overheated markets and potential for a pullback.

Question 5

Which exchange has the lowest funding rates?

Accepted Answer

Funding rates vary by exchange and change every 8 hours. Generally, exchanges with higher open interest like Binance and Bybit have more stable funding rates. Decentralized exchanges like dYdX and Hyperliquid may have different rate structures. Use our tracker to compare rates in real-time across all major exchanges.

Question 6

Can you make money from funding rates?

Accepted Answer

Yes. Traders use funding rate arbitrage strategies to earn consistent yield. By holding a spot position and shorting the same asset on a perp exchange with positive funding, you collect funding payments every 8 hours while staying delta-neutral. This strategy works best during bullish markets when funding rates are consistently positive.

Crypto Funding Rate Tracker

Funding Rate Tracker

How Funding Rates Work

Price Diverges

Payments Settle

Equilibrium Restores

Frequently Asked Questions

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