Does funding go to the exchange?

No. Funding is paid directly between long and short traders. The exchange only facilitates the transfer.

How often is funding charged?

On most exchanges every 8 hours (three times a day), though some use 1-hour or 4-hour intervals. Check your exchange's contract details.

Can the funding rate ever pay me?

Yes. If you are short while funding is positive, or long while it is negative, you receive the payment instead of paying it.

Is funding the same as a trading fee?

No. A trading fee is paid to the exchange when you open or close. Funding is a separate, recurring payment between traders for holding a perpetual position.

Guide

Perpetual Futures and Funding Rates, Explained Simply

If you have spent any time on a crypto exchange, you have seen perpetual contracts and a small number called the funding rate ticking next to the price. Most traders ignore it, then wonder why a position quietly bleeds money even when the price barely moves. This guide explains what perpetual futures are, how funding works, and why it matters for what you actually pay to trade.

Updated June 2026

What is a perpetual future?

A traditional futures contract has an expiry date: you agree to buy or sell an asset at a set price on a set day, and it settles then.

A perpetual future removes the expiry. You can hold the position as long as your margin covers it. That is convenient, but with no settlement date to pull the contract price back in line with spot, the two could drift apart. Exchanges solve this with the funding rate.

How the funding rate keeps the price honest

The funding rate is a small payment exchanged directly between traders, usually every 8 hours, to keep the perpetual price close to spot.

When the perpetual trades above spot, funding is positive and longs pay shorts. When it trades below spot, funding is negative and shorts pay longs. Nobody pays the exchange for funding; it is a transfer between traders that nudges the price back toward spot.

A quick example

Say you are long $10,000 of a BTC perpetual and funding is +0.01% for the period. You pay $10,000 x 0.01% = $1.00 to the shorts this period.

That looks tiny, but funding is charged every 8 hours, three times a day. In a hot market it can spike to 0.05%-0.1% per period. At 0.05% three times a day, that is about $15 a day, or roughly $450 a month, just to hold the trade, on top of your trading fees.

Why this matters for your costs

Most traders obsess over entry and exit and forget the two ongoing costs that decide profitability: trading fees on every open and close, and funding on every period you hold.

You cannot avoid funding entirely, but trading fees are far more controllable than people think. The standard taker fee on most exchanges is around 0.05%-0.06% per trade, and for an active trader that is mostly overhead.

The lever almost nobody sets up

Every trade generates a fee, and a portion of that fee is paid out by the exchange as a referral commission. Normally that goes to whoever's link you signed up under, and you get nothing back.

Through an official cashback partner, that same commission returns to you instead, automatically in USDT, on every trade. For a futures trader paying funding and fees, getting a share of your fees back is one of the few cost cuts fully in your control.

Lower your real cost of trading

Pick your exchange and check your estimated cashback at TetherBoost. A share of every trading fee comes back to you in USDT, paid by the exchange, automatically.

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Frequently asked questions

Does funding go to the exchange?: No. Funding is paid directly between long and short traders. The exchange only facilitates the transfer.
How often is funding charged?: On most exchanges every 8 hours (three times a day), though some use 1-hour or 4-hour intervals. Check your exchange's contract details.
Can the funding rate ever pay me?: Yes. If you are short while funding is positive, or long while it is negative, you receive the payment instead of paying it.
Is funding the same as a trading fee?: No. A trading fee is paid to the exchange when you open or close. Funding is a separate, recurring payment between traders for holding a perpetual position.