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What Is the Funding Rate Mechanism in Perpetual Swaps?

A periodic payment between long and short traders that keeps the perpetual swap price anchored to the spot price of the crypto.
Greeks.Live29.10.25

What Is the Funding Rate Mechanism in Perpetual Swaps?

The funding rate is a small periodic payment exchanged between long and short traders in a perpetual swap contract. It is designed to keep the swap price close to the spot price of the underlying crypto.

If the swap price is higher than the spot price, longs pay shorts (positive funding rate). If it is lower, shorts pay longs (negative funding rate).

What Mechanism Replaces Expiration for a Perpetual Option?
Define the “Funding Rate” Mechanism in Perpetual Futures Contracts
How Do Funding Rates Work in Perpetual Swap Contracts?
What Is the Concept of “Funding Rate” in Perpetual Derivatives?

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