Perpetual funding rates: comparison, APR and risks
perpfuse · Updated:
How to compare funding rates across exchanges, normalize different intervals and distinguish annualized APR from realized income.
Who pays funding?
Funding is a periodic payment associated with a perpetual contract. A positive rate generally means longs pay shorts; a negative rate reverses that direction. Check the venue’s exact rule, settlement asset and payment time. An indicative rate can change before settlement. Holding a position outside the assessment period is not the same as receiving the displayed rate.
Compare the same time interval
A rate of 0.01% every eight hours is equivalent to 0.00125% per hour. A second venue charging 0.005% hourly has a lower displayed number but a higher hourly cost. In perpfuse, compare the interval and normalized rate together. Unknown intervals and flagged anomalies should not be treated as comparable opportunities.
APR is an extrapolation, not a return
Simple annualization is interval rate × (24 ÷ interval hours) × 365. For 0.01% every eight hours, this gives 10.95% APR. A hypothetical $10,000 linear position produces a $1 payment for that settlement, assuming unchanged notional and a settled 0.01% rate. This excludes fees and does not promise $1 at every future settlement. Historical income requires recorded payments, not today’s rate multiplied backward.
Funding arbitrage still has costs
A long on one venue and a short on another can reduce directional exposure, but funding can reverse and the legs can liquidate independently. Compare entry and exit fees, spread, slippage, collateral, transfer delays and counterparty risk. A wide funding difference is a research starting point, not a guaranteed net profit. Use asset pages to compare the actual contracts and inspect data freshness before interpreting rankings.
Sources and methodology
Educational analytics only. No personalized investment advice, trade execution or guaranteed returns. Verify contract terms and current data with the venue.