Perpetual funding rate

Jana opens a long: a position that benefits from a rising contract price before costs. She is not buying bitcoin for her own wallet. She is trading perpetual futures, a contract tracking its price without a fixed expiry date. When that contract trades too far above the spot market, where bitcoin is bought directly, funding can make longs more expensive to hold and reward the opposite position, a short. A positive rate means longs pay shorts; a negative rate reverses the flow. This encourages prices to converge but does not guarantee equality. Deribit takes no fee from these transfers. Trading fees are separate, however, and zero funding does not remove them. [1] [7]

Jana sees “per 8 hours” beside the rate. That does not mean money changes hands only at a scheduled instant. Deribit quotes funding this way but calculates it continuously. The former Coinbase International Exchange model applied funding every 1 hour; Coinbase Global Exchange’s general help pages still describe hourly intervals. Institutional accounts migrated to Deribit, however, follow its model from 1 October 2026. That migration does not cover every Coinbase app user. Before comparing rates, Jana therefore checks the quoted period, the specific product and her account’s rules. The same percentage over different periods is not the same cost. [1] [2] [5] [6]

Take a simple dollar-denominated example. Jana holds a position worth 20,000 USD and the rate for the full applicable period is 0.01%. Funding is 2 USD. The notional is the value the contract represents. Margin, by contrast, is collateral deposited to cover potential losses. If Jana supplied 2,000 USD, that same payment is 0.1% of her margin. These are different denominators, not different funding rates. Adding margin without changing the notional does not itself increase the funding base. The actual notional can nevertheless change with price and the contract’s design. [3]

The dollar example explains the scale of a payment, but it is not universal. Some contracts settle in a stablecoin, a token designed to track a particular currency’s value; others settle in BTC. An inverse bitcoin contract may quote notional in USD while calculating a BTC funding base using the price specified by the venue. A linear contract typically derives value directly from the underlying quantity and price. Jana therefore checks more than the numbers in her statement: she checks the payment currency, contract multiplier and price used. Mark price is the exchange’s reference price for calculations and need not equal the last traded price. [1] [3]

For a continuous calculation, keep the notional fixed at 20,000 USD and the rate at 0.01% per 8 hours. Holding for 2 hours produces a proportional payment of 0.5 USD. Changes to the rate or base during that time would require the individual periods to be accounted for separately. Another model asks whether the position is open at interval end. Coinbase’s help for interval-based funding describes that rule: closing beforehand avoids both the payment and the credit for that interval. It is not a calculation proportional to minutes held, and must not be carried over to Deribit’s continuous model. Jana needs to identify which rule applies to her contract. [1] [4] [6]

Jana changes direction and holds a short, which benefits from a falling price before costs. She receives 2 USD in funding, but a price rise causes a loss of 100 USD. Her combined result is minus 98 USD before trading fees and other costs. The receipt is therefore not interest on a safe deposit. The rate can also change sign, turning a recipient into a payer. If price movements or payments erode collateral too far, the exchange can forcibly close the position: this is liquidation. Expected future funding cannot rescue a position whose margin is insufficient now. [1]

A rate of 0.01% per 8 hours can be annualized simply by assuming the same rate 3 times a day for 365 days. That gives 10.95% without compounding, meaning without reinvesting payments to earn further returns. It is an arithmetic illustration with a constant rate and base, not a market forecast. Nor is it APY, an annual yield including compounding, or a return on Jana’s margin deposit. A meaningful comparison uses matching periods, signs, currencies and notionals. Otherwise a striking annual figure may merely reflect a different display convention. [1] [2]

Jana’s screen may show an estimated next rate, a running calculation and a payment already booked. Those are different records. To check her history, she combines her position’s direction with the rate’s sign and checks position size, currency and holding time. Deribit reflects funding immediately in account equity, and received funding can be used for trading; it moves into the cash balance at daily settlement at 08:00 UTC. Trading availability and withdrawal availability therefore occur at different stages. Explaining a mismatch between an estimate and the statement requires the history of that particular contract, not just the rate currently on screen. [1] [6]