What is Funding Rate?

The Funding Rate is designed to keep the perpetual contract prices close to the underlying spot index prices.

The Funding Rate is a small fee paid by one side of the contract to the other. It is purely transferred between traders and not charged by the exchange.

The Funding Rate is determined by the market and changes over time. When the funding rate is positive, Longs pay Shorts. When the funding rate is negative, Shorts pay Longs.