Funding Rate
Perpetual futures contracts have no expiry date. Without a settlement mechanism, the contract price would drift away from the underlying spot price. Funding rates solve this by transferring small payments between traders on opposite sides of the market: when the perp trades at a premium to spot, longs pay shorts; when it trades at a discount, shorts pay longs.
On Hyperliquid, funding is calculated and charged every hour, not every 8 hours like Binance or Bybit. The hourly cadence makes funding cost much more visible in trade analytics and incentivizes mean-reversion of the basis. A typical funding rate sits in the ±0.005% per hour range; extreme rates above 0.05% per hour signal market stress and crowded positioning.
For traders, funding has two implications. First, it is a real cost or revenue line item — a long held for 24 hours at +0.01% hourly funding pays 0.24% to shorts. Second, extreme funding is a contrarian signal: persistent high positive funding indicates over-leveraged longs, which often precedes long squeezes.
How PerpLog uses Funding Rate
PerpLog tracks per-trade funding cost in the auto-journal and surfaces extreme funding as a market-briefing signal. The Adaptive Sizing engine factors funding into expectancy when computing whether a setup is still profitable after holding costs.
Related reading
- Market Briefing: AI-Powered Hyperliquid Intelligence — Documentation
- Understanding Funding Rates on Hyperliquid — Blog
- Hyperliquid Trading Fees Explained: How to Minimize Costs — Blog
Browse all terms in the trading glossary.