Payments between longs and shorts that keep the perpetual price tethered to spot. Hyperliquid pays them every hour, at one eighth of the computed eight-hour rate. Most venues settle every eight hours.
How the rate is built
Two components. A fixed interest component of 0.01% per eight hours — 0.00125% per hour — representing the cost difference between borrowing dollars and borrowing spot crypto. And a premium component that floats with the gap between the perpetual price and the spot oracle.
When the perp trades above spot, funding is positive and longs pay shorts. Below spot, shorts pay longs. The premium is sampled every five seconds and averaged over the hour, which makes single-block manipulation expensive.
Funding moves between traders. The protocol takes nothing.
What hourly settlement changes
A position opened and closed inside one hour pays no funding at all — short-horizon trading is meaningfully cheaper than on eight-hour venues.
For anything held longer, funding compounds faster than traders expect. At 0.01% per hour, a week costs about 1.7% of notional before any price movement.
Why it has to be priced
Funding is a known, forecastable cost. Any strategy holding directional exposure across hours has to earn more than the carry, or its backtest is describing a trade that live conditions won’t reproduce.