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Trading

What Is Funding Rate?

Periodic payments between long and short traders in perpetual futures.

Definition

Funding rates are fees exchanged between long and short holders to keep perpetual futures prices aligned with spot. If funding is positive, longs pay shorts. If negative, shorts pay longs.

How It Works

Funding rates are calculated hourly or every 8 hours based on the difference between perp and spot prices. They incentivize arbitrageurs to close the gap, keeping prices aligned.

In Continuum

Continuum synthetic tokens have NO funding rates. Unlike perpetual futures, you can hold L/S tokens indefinitely without paying or receiving funding. This makes long-term positions more cost-effective.

Related Terms

Perpetual Futures (Perps)

Futures contracts with no expiration date that track an underlying asset.

Synthetic Asset

A token that tracks the price of another asset without requiring ownership of the underlying.

Arbitrage

Profiting from price differences of the same asset across different markets.

More Trading Terms

LiquidationLeveragePerpetual Futures (Perps)Arbitrage

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