What is a perpetual future
A perpetual future is a futures contract that never expires. You can hold it indefinitely, which is the whole appeal and also the thing that creates the mechanism people find confusing.
The problem an expiry normally solves
An ordinary futures contract converges on the spot price because it settles on a known date. Remove the expiry and nothing forces the two together, so the contract can drift away from the asset it is supposed to track. Something else has to do that job.
That job is the funding rate
At regular intervals, one side pays the other. When the perpetual trades above spot, longs pay shorts, which makes holding a long more expensive and pulls the price down. When it trades below, the payment reverses. It is a continuous nudge rather than a settlement, and it is why the price stays close to spot without ever being forced there.
What that means if you hold one
Your profit is not only the price moving your way. If you hold a long while funding is positive, you are paying to hold it, every interval, whether or not the price moves. Over a long enough hold that cost can exceed the move you were right about. Funding is not a fee on trading, it is a cost of time.
Reading it live
The funding column below is the real, current rate on each market. Positive means longs are paying shorts right now. Watching it move is a faster way to understand the mechanism than any explanation, including this one.
Live, right now, on this page
| Market | Price | Funding | 24h volume |
|---|---|---|---|
| BTC | $78,000.50 | 0.0013% | $144,118,764 |
| ETH | $2,452.85 | 0.0013% | $98,133,720 |
| SOL | $104.59 | 0.0013% | $36,751,929 |
| HYPE | $83.24 | 0.0013% | $10,211,466 |
Live perpetual markets with their current funding rates, read at render. Positive funding means longs are paying shorts right now.
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