Funding is a periodic payment between long and short traders that keeps a perpetual futures contract tethered to the spot price. Positive funding means longs pay shorts (the crowd is leaning long); negative funding means shorts pay longs. Extreme funding signals crowded one-sided positioning, which often precedes a squeeze in the opposite direction.
This term belongs to Market data & derivatives. See how it fits the bigger picture in Foundation, part of the free DEGEN ACADEMY — or watch it play out on the live terminal.
FAQ
What is Funding rate?
Funding is a periodic payment between long and short traders that keeps a perpetual futures contract tethered to the spot price. Positive funding means longs pay shorts (the crowd is leaning long); negative funding means shorts pay longs. Extreme funding signals crowded one-sided positioning, which often precedes a squeeze in the opposite direction.