If you hold an open perpetual futures (perp) position on Hyperliquid and have noticed a small, recurring debit or credit appearing in your margin account on a regular schedule, that is funding rate settlement. It is not a trading fee, a withdrawal penalty, or a charge from the platform — it is a peer-to-peer transfer between long and short traders, designed to keep the perp price aligned with the underlying asset’s spot price.
Funding is entirely separate from the one-time fees charged when you open or close a position. Those include Hyperliquid’s published maker and taker fees, and on Trending, a 0.02% builder fee that is shown clearly before you confirm a trade and is verifiable on-chain. Unlike these one-time trade costs, funding recurs for as long as you hold the position, and its size and direction change with market conditions.
Perpetual futures have no fixed expiration date, which is one of their core benefits: you can hold a position for as long as you want, without rolling contracts or waiting for settlement. But that lack of expiry creates a problem: without a forcing mechanism, the perp market price could drift far away from the spot price of the underlying asset, depending on whether most traders are bullish or bearish.
Funding is the mechanism that fixes this drift. It creates a regular, small transfer between the two sides of the market that incentivizes traders to take the position that pushes the perp price back toward spot. For example, if most traders are going long and demand pushes the perp price above spot, funding will flow from longs to shorts. This makes holding a long position slightly more expensive and holding a short position slightly more rewarding, encouraging some traders to sell longs or open shorts, which pulls the perp price back down toward spot. If the perp trades below spot, the flow reverses: shorts pay longs, incentivizing buying that pushes the price back up.
The funding rate is expressed as a percentage per funding interval, and its sign tells you which direction the payment flows.
| Funding Rate Sign | Long Position Holders | Short Position Holders |
|---|---|---|
| Positive | Pay funding | Receive funding |
| Negative | Receive funding | Pay funding |
A positive funding rate means longs pay shorts. If you hold a long position when the rate is positive, you will see a debit from your margin account at settlement. If you hold a short position, you will see a credit for the same amount. A negative funding rate means the opposite: shorts pay longs. Short holders pay, and long holders receive the funding amount.
The magnitude of the rate is the same for both sides — it is simply a transfer from one group to the other, with no cut taken by the exchange. The rate itself is calculated based on the average gap between the perp price and the spot price over the preceding funding interval, so it changes regularly as market sentiment shifts.
One of the most common sources of confusion with funding is what the rate is applied to. Funding is calculated on the full notional value of your position, not on the amount of margin you have put up to open the trade.
Notional value is the total market value of the contracts you hold, calculated as the number of contracts multiplied by the current perp price. Margin, by contrast, is the amount of capital you commit to the position to cover potential losses. When you use leverage, you control a much larger notional value with a smaller amount of margin — and because funding is assessed on that full notional value, the cost relative to your margin is proportionally larger.
For example, if your initial margin is a small fraction of the position’s notional value, even a tiny funding rate on the notional can feel like a much larger charge against your margin balance. This also means funding costs can impact your liquidation risk over time: recurring funding debits reduce your available margin, which can move your liquidation price closer to the current market price. On Trending, your liquidation price is shown clearly before you confirm a position, but it is important to note that this price can shift over the life of the trade as funding accrues and your margin balance changes. The $20 minimum margin for a position on Trending applies to the initial margin requirement, not the notional value that funding is calculated on — even a minimum-size position can have a notional value much larger than the initial margin, with funding assessed on that larger amount.
Because funding is charged every interval, even very small per-interval rates can add up to a significant cost over time, making it a critical factor in deciding how long to hold a perp position.
A single funding interval’s charge is usually small — often a tiny fraction of a percent of notional value — but over days, weeks, or months, the cumulative total can easily exceed the one-time trading fees you paid to open the position. If the funding rate stays consistently in one direction (for example, positive during a prolonged bull market when long positions are dominant), holders on the paying side will see regular deductions from their margin that add up over time. For leveraged positions, this cumulative cost is amplified relative to the initial margin committed.
This is why perps are generally better suited for short to medium-term trades, rather than very long-term buy-and-hold strategies. If you plan to hold a position for many months or years and expect funding to consistently work against you, a spot position or a longer-dated futures contract may be a better fit, as they do not carry recurring funding costs.
On Hyperliquid, funding settles every hour, on the hour. While the final settlement happens at the end of each hourly interval, funding accrues continuously over the hour based on your position size and the current rate. If you open a position partway through an hour, you will only accrue funding for the portion of the interval you hold the position. If you close the position before the hour ends, the accrued funding will be settled immediately as part of your closing PnL, rather than waiting for the next hourly settlement.
All funding payments are processed through your margin account. On Trending, crypto majors, US equity, and gold perps all settle in a single shared margin account, so funding debits and credits from any of your positions will flow through the same balance, alongside trading fees and realized PnL.
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Trending does not provide investment advice. Trading perpetual contracts involves market and leverage risk. You are responsible for wallet safety and local regulatory compliance.