In short. The funding rate is a periodic payment between longs and shorts in perpetual futures that keeps the contract price close to spot. A positive rate means longs pay shorts; a negative rate means shorts pay longs. Payment = position value at mark price × rate. On Bybit and Binance funding is settled every 8 hours by default (per the exchanges' help as of 13 October 2026), and the baseline rate is 0.01% per settlement, or 0.03% a day. Funding is charged on the whole position, not on the margin: at 10x leverage the baseline rate eats 9% of the margin in 30 days. Only positions open at the funding time pay or receive.
Why funding exists
A perpetual contract never expires, so nothing forces its price to stay near spot. Funding fixes that: when the contract trades above spot, the rate turns positive, holding longs gets expensive and holding shorts pays. Selling the contract pulls its price back toward spot. When the contract trades below spot, it works the other way round. The exchange itself earns nothing from funding: the payment goes directly from one side of the market to the other.
How the rate is calculated
Bybit and Binance use the same formula:
F = P + clamp(I − P, −0.05%, +0.05%)
- I — the interest rate: 0.03% a day, i.e. 0.01% per 8-hour interval. Some pairs, such as ETHBTC, use 0%.
- P — the average premium index: how far the contract price in the order book (the average fill price for a set notional) is above or below the spot index price. The exchange samples it over the whole interval, and samples closer to the settlement weigh more.
- clamp keeps I − P within ±0.05%. So while the premium index stays between −0.04% and 0.06%, the rate is exactly 0.01% — which is what a calm market shows most of the time.
The result is capped as well. On Bybit the upper limit is the smaller of (initial margin rate − maintenance margin rate) × 0.75 and the maintenance margin rate of the lowest risk tier. On Binance the cap for major contracts is ±0.75 × the maintenance margin rate at maximum leverage (±0.3% for BTCUSDT in the help article's example), and ±2% for the rest. When the rate hits the cap at a settlement, both exchanges switch the contract to hourly funding.
When funding is paid and by whom
- Funding times on an 8-hour interval are 00:00, 08:00 and 16:00 UTC. Some contracts settle every 4 hours or every hour — the interval is in the contract specification and next to the rate on the trading page.
- Only open positions pay. Close before the funding time and you neither pay nor receive. Open right after it — same. The settlement moment itself has some slack: ±5 seconds on Bybit, up to 15 seconds on Binance.
- The sign decides who pays. «+» means longs pay shorts, «−» means shorts pay longs. Whether the position is in profit does not matter.
- Where it is taken from. From the available balance, and if that is not enough — from the position margin. In isolated margin this moves the liquidation price closer.
Payment formula and an example
Payment = size × mark price × rate
A long of 0.1 BTC, mark price 60,000 USDT, rate 0.01%. The position is worth 6,000 USDT, one settlement costs 0.60 USDT, a day costs 1.80 USDT, 30 days cost 54 USDT. If the position was opened at 10x, the margin is 600 USDT, and funding takes 9% of the margin in a month. A short of the same size receives those 54 USDT.
What it costs to hold a position
A position worth 10,000 USDT at 10x leverage (1,000 USDT margin), funding every 8 hours; rate and price are kept constant for simplicity:
| Rate per 8 h | Per settlement | Per day | Per 30 days | Share of margin in 30 days | Per year, of position |
|---|---|---|---|---|---|
| 0.005% | 0.50 USDT | 1.50 USDT | 45 USDT | 4.5% | 5.5% |
| 0.01% | 1 USDT | 3 USDT | 90 USDT | 9% | 11.0% |
| 0.03% | 3 USDT | 9 USDT | 270 USDT | 27% | 32.9% |
| 0.05% | 5 USDT | 15 USDT | 450 USDT | 45% | 54.8% |
| 0.1% | 10 USDT | 30 USDT | 900 USDT | 90% | 109.5% |
The takeaway: for a trade lasting a few hours funding barely registers; for a position held for weeks it is a major cost on a par with fees. A one-week long at the baseline rate goes through 21 settlements — 0.21% of the position value, or 2.1% of the margin at 10x. If the trade targets +1% in price (+10% on margin), funding takes a fifth of the result.
Compare rates with different intervals per day: rate × settlements per day. 0.01% every 4 hours is 0.06% a day — twice as expensive as 0.01% every 8 hours.
Funding as income
While the rate stays positive, shorts collect it. That is the idea behind «buy spot, sell the same amount of the perpetual»: such a position barely depends on price and earns funding. It has its own risks: the rate can turn negative, fees are paid on four trades (entry and exit on both legs), and a short with thin margin can be liquidated in a sharp rally while the spot sits in another account.
Where to see the rate and your payments
- Current rate and the countdown to settlement — above the chart on both exchanges' trading pages. Binance keeps the rate history under «Data» → «Futures Data» → «Funding Rate History».
- Your payments on Bybit — in the futures trade history with the Funding filled type (a positive amount means you paid, a negative one means you received) and in the Unified Trading Account transaction log, type «Funding Rate Settlement».
- Alerts. The Bybit app pushes the predicted rate 30 minutes before settlement; Binance can notify you when the expected rate reaches a threshold (0.25% by default).
What Davinchu does
A Bybit futures account connects with a read-only key, and two years of closed positions are imported. In every trade funding is kept apart from the result: gross P&L, fees and funding are stored separately, and their sum matches Bybit's «Closed P&L» to the cent. The trade card shows funding in the «Swap» field.
- Funding · 30 days — a line in the account statistics next to fees: how much funding you paid or received on trades closed over the last 30 days.
- Funding for the selected period — a metric on the «Trades» tab of the account analytics: «+» received, «−» paid.
- The «Margin call approaching» alert goes to Telegram, email or Discord when the account maintenance margin rate in cross or Portfolio Margin reaches 80% — even during quiet hours.
This shows what a trading style really costs: if long holds keep giving a noticeable share of profit to funding, it is a reason to hold shorter or to trade the side that receives funding. Trades land in the journal with full statistics, and there is no need to export the history as in «Bybit trade history: how to export and analyze it». The Free plan connects two accounts at no cost; more on crypto features — on the «Davinchu for crypto traders» page.