A funding rate is the percentage used to calculate funding exchanged between positions in a perpetual contract. The mechanism encourages the contract price to stay near a reference market, but does not guarantee exact price equality.
Direction and amount
Under the common convention, a positive rate means long holders pay short holders; a negative rate means shorts pay longs. Eligibility and payment timing follow the contract’s rules. Funding is generally separate from exchange trading fees.
For a hypothetical linear contract with 10,000 USDT of eligible position value and a positive 0.01% rate for one funding event, a long pays 1 USDT. The calculation uses position value, not merely the margin deposit, and ignores other costs.
A rate belongs to a period
Rates may depend on a premium measure, interest component, caps and averaging rules. Formulas and intervals vary by venue and contract and can change. A predicted rate may differ from the rate ultimately applied.
Compare rates only after accounting for their periods. A single positive reading is not a reliable forecast of future prices or payments. Receiving funding can be outweighed by price losses, fees or liquidation risk.