Perpetual Funding Rate Calculator
Perpetual futures contracts are a staple of DeFi trading, allowing leveraged exposure without an expiry date. The funding rate mechanism keeps the perpetual price close to the underlying spot price by periodically transferring payments between long and short holders. If you hold a position, the funding rate is effectively an ongoing cost (or income) that affects your net P&L. This calculator computes the total funding payment for a given position size, funding rate per interval, and number of intervals held, along with the annualized cost rate so you can compare funding costs across different protocols and time periods.
Perpetual funding payment formula
Funding Payment = Position Size * (Funding Rate / 100) * Intervals
Annualized Rate = ((1 + Funding Rate / 100)^(Intervals per Day * 365) - 1) * 100
Positive funding means long positions pay the amount to short positions each interval. Negative funding means shorts pay longs. Funding payments reduce (or increase) your effective position value.
Interpreting funding rates
- 0.01% per 8 hours (standard base): neutral market, funding is near equilibrium. Annualized: roughly 10.95%.
- 0.05% per 8 hours: moderately bullish sentiment. Annualized: roughly 57.36%.
- 0.10% per 8 hours: strongly bullish; significant cost to hold longs. Annualized: roughly 134.00%.
- Negative funding: bearish sentiment; shorts pay longs. Long holders receive funding income.
- Funding rate spikes often precede market reversals, as extreme sentiment becomes unsustainable.
Perpetual funding: frequently asked questions
What is a perpetual futures funding rate?
Perpetual futures contracts have no expiry date. Instead, they use a funding rate mechanism to anchor the perpetual price to the spot price. Long positions pay shorts when funding is positive; shorts pay longs when funding is negative. Funding is typically settled every 8 hours.
How is the funding payment calculated?
Funding Payment = Position Size * Funding Rate * Number of Intervals. For example, a $10,000 long position at 0.01% per 8-hour interval over 3 intervals (24 hours) pays: $10,000 * 0.0001 * 3 = $3.00. Positive funding means longs pay shorts.
What does a high funding rate mean?
A high positive funding rate (above 0.1% per 8 hours, or about 0.3% daily) means the market is very bullish; traders are paying a premium to hold long positions. Annualized, 0.1% per 8 hours equals about 109% APR. This creates strong arbitrage incentives for cash-and-carry trades.
What is a cash-and-carry trade in perpetuals?
A cash-and-carry trade involves buying the spot asset and shorting an equivalent perpetual position. If funding is positive, you collect funding payments on your short while being delta-neutral (spot gains offset perp losses). This is a low-risk yield strategy when funding rates are elevated.
How often is funding settled on major protocols?
dYdX, Binance, and most centralized perpetual exchanges settle funding every 8 hours (3 times per day). Some decentralized protocols settle continuously or hourly. Check your specific protocol's documentation for its funding interval.
Official sources
- dYdX Foundation: dYdX Protocol Documentation.
- Ethereum Foundation: Decentralized Finance (DeFi).
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.