Funding Rates
Funding rates are periodic payments exchanged between long and short holders on perpetual futures markets. They keep the perpetual contract price anchored to the underlying spot oracle price. Hyperliquid collects no fees on funding — all payments go directly between traders.
How Funding Works
Section titled “How Funding Works”Perpetual contracts have no expiry, so funding rates replace the convergence mechanism that expiry provides in traditional futures. When the perpetual price trades above the oracle (spot) price, longs pay shorts. When it trades below, shorts pay longs.
Payments are made every hour, at 1/8th of the calculated 8-hour funding rate.
Funding Rate Formula
Section titled “Funding Rate Formula”F = P + clamp(interest_rate − P, −0.0005, +0.0005)| Variable | Description |
|---|---|
F | Funding rate for the 8-hour interval |
P | Average Premium Index over the interval |
interest_rate | Fixed at 0.01% per 8 hours (~11.6% APR) |
The interest rate reflects the traditional borrowing cost differential between USD and crypto spot assets.
Premium Index
Section titled “Premium Index”The premium measures how far the perpetual price deviates from the oracle price:
premium = impact_price_difference / oracle_priceThe impact price difference is derived from the max bid/ask pressure levels relative to the oracle price — similar to the impact mid-price methodology used by major centralized exchanges.
The premium is sampled every 5 seconds and averaged over the full hour to reduce manipulation risk.
Funding Payment Calculation
Section titled “Funding Payment Calculation”Each hour, your funding payment is:
payment = position_size × oracle_price × hourly_funding_rateNote that the spot oracle price — not the mark price — is used to convert position size to notional USD value.
- Positive funding rate: longs pay shorts (perpetual trading above oracle)
- Negative funding rate: shorts pay longs (perpetual trading below oracle)
Funding is capped at 4% per hour.
Oracle Price
Section titled “Oracle Price”The oracle price used for funding is computed by validators independently as a weighted median of spot mid-prices across eight exchanges:
| Exchange | Weight |
|---|---|
| Binance | 3 |
| OKX | 2 |
| Bybit | 2 |
| Kraken | 1 |
| Kucoin | 1 |
| Gate IO | 1 |
| MEXC | 1 |
| Hyperliquid | 1 |
The final oracle price used by the clearinghouse is the stake-weighted median of all validators’ submitted prices. Oracle prices update approximately every 3 seconds.
Special cases apply:
- Assets primarily liquid on Hyperliquid (e.g., HYPE) exclude external exchange prices.
- Assets primarily liquid externally (e.g., BTC) exclude Hyperliquid prices.
Hyperps
Section titled “Hyperps”Hyperps are perpetuals with no external spot oracle, designed for assets not yet listed on major exchanges. Their oracle price is derived from an 8-hour exponentially weighted moving average (EMA) of the past day’s minutely mark prices.
Additional constraints apply to hyperp mark prices:
- Cannot exceed 3× the 8-hour average mark price
- Cannot exceed 1.5× the median external perp price
- Oracle price cannot exceed 4× the one-month average mark price
Once the underlying asset achieves spot trading on Binance or OKX, the hyperp automatically converts to a standard perpetual.