Does Higher Leverage Increase or Decrease the Funding Rate in Perpetual Swaps?

Leverage itself does not directly increase or decrease the calculated funding rate. The funding rate is determined by the difference between the perpetual contract's price and the spot price (the basis).

However, high leverage can indirectly influence the funding rate by contributing to larger open interest and greater price divergence, as highly leveraged traders are more sensitive to market movements, potentially skewing the market and thus the funding rate.