What Is the Funding Rate in Crypto? How It Works and What It Costs
The funding rate is the payment that keeps a perpetual future close to the spot price. Longs pay shorts when it is positive, shorts pay longs when it is negative. Caps and settlement times differ across the 9 exchanges in this guide, and at the base rate a position held for four days pays more in funding than in taker fees.
- Funding is paid between traders, not to the exchange: longs pay shorts when the rate is positive, shorts pay longs when it is negative.
- You pay or receive it only if your position is open at the settlement time, and it is charged on the full position value, not on your margin.
- Most exchanges start from an interest rate of 0.01% per 8 hours, add a premium, and cap the result per contract. At that base rate a 200,000 USDT position pays 60 USDT a day.
- Funding settles every 8 hours by default, but 28% to 60% of contracts now settle every 4 hours, and on Bybit, OKX and BloFin a rate at its cap pushes the contract toward hourly settlement.
- At the base rate and a 0.055% taker fee, funding overtakes the cost of opening and closing a position once it stays open for four days. Fee discounts and cashback reduce only the fees.
Open a 200,000 USDT long on Bybit, hold it for a month, and you pay 220 USDT in taker fees to get in and out at the regular 0.055% rate. If funding stays at the base rate of 0.01% per 8 hours, the same position pays 1,800 USDT in funding over those 30 days. The fee schedule shows you the first number. The second one only appears in your funding history, settlement by settlement.
What is the funding rate, and who pays whom?
The funding rate is a payment between traders, not a fee to the exchange: when it is positive, longs pay shorts, and when it is negative, shorts pay longs. It settles every 8 hours by default, and every 4, 2 or 1 hour on some contracts.
A perpetual future never expires, so nothing forces its price back to the spot market the way a delivery date does. Funding does that job. When the perpetual trades above the index price, the exchange's reference price for spot, the rate rises above the base rate and holding a long gets more expensive, which pulls the price back down. Only when it trades clearly below the index does the rate turn negative, so shorts pay and the price is pushed back up. Every open long has a short on the other side, so a positive rate is no sign of more longs than shorts. It shows that longs are paying the interest part of the rate plus any premium.
The payment is the position value times the rate, so it is charged on the full size of the position, not on your margin. You pay or receive it only if the position is open at the settlement timestamp. Exchanges handle the last seconds differently. Bybit does not guarantee whether a position opened or closed within 5 seconds of settlement counts, OKX says its check can take up to a minute, MEXC says settlement can run up to 15 seconds late, and WEEX says the actual funding time can be up to 60 seconds off.
The perpetual trades above, at or only slightly below the index price, so the interest part keeps the rate positive. Longs pay, and a larger premium makes them pay more.
The perpetual trades clearly below the index price. Shorts pay, which pushes the price back up toward spot.
How is the funding rate calculated?
Bybit, OKX, Bitget, Phemex, BloFin and LeveX use the same recipe: an interest rate of 0.01% per 8 hours plus a premium index that measures how far the perpetual trades above or below the index price, with the result capped for each contract.
Bybit, Phemex, BloFin and LeveX publish the classic form: funding rate = premium + clamp(interest minus premium, minus 0.05%, plus 0.05%). The clamp limits the gap between interest and premium to 0.05% in either direction. As long as the premium stays inside that band, the result is the interest rate, so a calm market settles at 0.01% per 8 hours. On shorter intervals the interest part shrinks with the interval, so a calm 4-hour contract settles at 0.005%. OKX, since 1 June 2026, and Bitget, since 22 September 2025, scale the whole rate, premium included, by the interval: rate × interval hours ÷ 8.
The cap is set per contract, and the gap between exchanges is wide. For BTCUSDT on 14 October 2026 it was 0.075% at LeveX, 0.18% at MEXC, 0.3% at Bitget and Bitunix, 0.333% at Bybit, 0.375% at OKX, 0.5% at BloFin and 2% at Phemex, in either direction. Smaller coins carry caps of 1% to 5% on most exchanges, while LeveX caps many of its altcoins at 0.495% or 0.75%. The rate on the trading screen is also not always final: Bybit, OKX and Phemex calculate it in real time and it moves until settlement, while Bitunix fixes each period's rate at the start of the period.
How often funding settles on 9 exchanges
All 9 exchanges settle funding every 8 hours by default, at 00:00, 08:00 and 16:00 UTC, but 28% to 60% of their USDT contracts now settle every 4 hours, and Bybit, OKX and BloFin move a contract to a shorter interval, down to every hour, when its rate hits the cap.
Bybit switches a contract to hourly settlement on its own when the rate reaches its limit at settlement. Since 14 April 2026, OKX steps a contract down one level at a time, from 8 hours to 4, 2 and 1. It goes back to the default only after 12 hours in which every settlement stayed within 0.20%. BloFin has adjusted intervals automatically since 9 December 2025 and does not announce each change. Bitget and MEXC change intervals pair by pair and announce most changes: MEXC moved PROMUSDT to hourly funding on 11 August 2026 and back to 4 hours three days later.
On Bitunix, BloFin and LeveX the 4-hour contracts already outnumber the 8-hour ones, while BTCUSDT runs on the 8-hour schedule on all 9. A static table goes stale within days, so treat the one below as a snapshot and check the countdown on the contract itself before you open a position you plan to hold.
| Exchange | Default | USDT contracts on 4h | BTCUSDT cap | Shorter intervals |
|---|---|---|---|---|
| Bybit | 8h | 380 of 798 | ±0.333% | Hourly when the cap is hit |
| OKX | 8h | 214 of 489 | ±0.375% | Steps to 4h, 2h, 1h when the cap is hit |
| Bitget | 8h | 388 of 854 | ±0.3% | Per pair, by announcement |
| MEXC | 8h | 524 of 1,094 | ±0.18% | Per pair, mostly by announcement |
| Phemex | 8h | 36 of 127 | ±2% | Per pair, can change without notice |
| Bitunix | 8h | 445 of 740 | ±0.3% | Per pair, by announcement |
| BloFin | 8h | 294 of 499 | ±0.5% | Automatic, hourly when the cap is hit |
| LeveX | 8h | 149 of 298 | ±0.075% | 7 contracts on 1h |
| WEEX | 8h | 484 of 1,027 | Not published | 2 contracts on 1h |
Snapshot of USDT perpetuals from each exchange's public API or funding page, 14 October 2026, 17:30 to 17:50 UTC. Funding on the 8h schedule settles at 00:00, 08:00 and 16:00 UTC everywhere, and BTCUSDT runs on 8 hours on all 9. Bitunix does not state the unit of its cap field, and we read its BTCUSDT value of 0.3 as 0.3%. Counts change daily.
What funding costs on a real position
At the base rate of 0.01% per 8 hours, a 200,000 USDT position pays 20 USDT at every settlement, 60 USDT a day and 1,800 USDT over 30 days, whatever leverage you use.
The payment depends on position size alone. The same 20 USDT is due whether you post 20,000 USDT of margin at 10x or 10,000 USDT at 20x, and at 20x it takes twice the share of your margin. Bybit, OKX and MEXC also warn that funding taken from your margin can move your liquidation price closer. Over a year, 0.03% a day adds up to 10.95% of the position value, before any premium in a hot market.
Compare that with the trading fees. Opening and closing the same 200,000 USDT position with taker orders at Bybit's regular 0.055% costs 220 USDT, once. If you close within three days, the fees are the bigger cost, because three days of funding come to 180 USDT. From the fourth day at the base rate, funding has overtaken them. Try your own numbers below: in a calm market, use 0.01% for an 8-hour contract and 0.005% for a 4-hour one.
- Per settlement
- 20 USDT
- Per day
- 60 USDT
- Whole holding period
- 1,800 USDT
What does a negative funding rate mean?
A negative funding rate means the perpetual trades below the index price, so shorts pay longs, and a long position collects funding at each settlement for as long as the rate stays negative.
It is not a buy signal on its own. A deeply negative rate tells you traders are paying a lot to stay short right now, and the price can still move either way. Rates at the cap show a market leaning hard to one side, and that is when Bybit, OKX and BloFin start settling more often, down to every hour.
Collecting funding is also the idea behind funding arbitrage: buy the coin on spot, short the same amount on the perpetual and collect the positive rate. The trade pays fees on four legs, two to open and two to close, and what you receive depends on the other side paying in full. Bitget and WEEX say a receiver can get less than the calculated amount when payers run short of margin, and Bitunix says the amount received depends on what it collects from the other side. The rate has to stay high for long enough to cover all four fee legs.
How to pay less for funding and fees
You avoid funding only by not holding a position at the settlement time, and you cut trading fees with cashback and maker orders, so the two costs need different tools.
Closing before settlement and reopening right after costs two taker fees of 0.055% each. That is 0.11% of the position, 11 times the 0.01% funding payment you avoid. It pays off only when the rate is far above normal. For positions you hold anyway, avoid the paying side when the rate sits near its cap, and check whether the contract now settles every 4 hours or every hour.
Funding is a transfer between traders, not a fee, so Trade Reclaim cashback does not apply to it. Trading fees are different: Trade Reclaim returns 30% to 50% of the maker and taker fees you pay on 9 exchanges, which is the part of the cost you control on every trade. The maker vs taker guide shows how your order type changes the fee, and the calculator shows what cashback returns at your volume.
Cut the cost you control
Funding depends on the market. Trading fees depend on your volume, and part of them comes back on every trade. Check the amount at your own volume.
Frequently asked questions
How often is the funding rate paid?
The default is every 8 hours, at 00:00, 08:00 and 16:00 UTC, on all 9 exchanges in this guide, and BTCUSDT runs on that schedule everywhere. Between 28% and 60% of USDT contracts now settle every 4 hours, and on Bitunix, BloFin and LeveX the 4-hour contracts outnumber the 8-hour ones. Bybit, OKX and BloFin also move a contract to a shorter interval when its rate hits the cap. The countdown on the contract page shows the schedule that applies right now, and funding applies only to perpetual futures, never to spot trades.
Is funding a fee the exchange charges?
Funding is not an exchange fee: it passes directly between traders on opposite sides of the contract. OKX, Bitget, MEXC, BloFin, LeveX and WEEX each state that they keep none of it. Trading fees work the other way and go to the exchange on every order. A maker or taker fee is charged on every fill, while funding is charged only on positions that are open at settlement.
Can I avoid paying funding?
You avoid funding only when you hold no open position at the settlement timestamp. Closing just before settlement and reopening right after skips the payment but costs two taker fees, 0.11% at a 0.055% taker rate, against a 0.01% funding payment at the base rate. That trade only makes sense when the rate is far above normal. Exchanges treat positions opened or closed in the last seconds before settlement differently, so close at least a minute early.
What is a high funding rate?
A funding rate is high once it reaches a multiple of the 0.01% per 8 hours that calm markets settle at. The base rate already equals 10.95% a year on the position value, so 0.05% per 8 hours costs more than 54% a year. The cap per contract sets the ceiling: 0.3% to 0.5% for BTCUSDT on 5 of the 9 exchanges in this guide, and 1% to 5% for small coins on most of them. A rate at the cap is also the trigger for faster settlement at Bybit, OKX and BloFin.
Is a negative funding rate bullish?
A negative funding rate is not a bullish signal by itself. It means the perpetual trades below the index and shorts are paying longs to hold their positions. The rate tells you what holding a short costs right now, and the price can still move either way. Longs collect the payment for as long as the rate stays negative.
Does Trade Reclaim cashback apply to funding?
Trade Reclaim cashback does not apply to funding, because it is a share of the trading fees you pay to the exchange. Funding is a payment between traders and not a fee to the exchange, so there is nothing to share back. The cashback is 30% to 50% depending on the exchange, on both maker and taker orders. On a long hold, fees and funding are two separate costs, and cashback reduces only the fees.
Trade Reclaim Research reads exchange fee schedules, contract specifications and API data for the 9 exchanges Trade Reclaim works with. The formulas, intervals and caps in this article come from each exchange's own documentation and public data, read on 14 October 2026. The interval counts in the table come from each exchange's public data within one 20 minute window, and every cost example was recalculated from those figures.
Trade Reclaim earns from exchange referrals and shares most of it back to you as cashback. Education, not financial advice.