Hyperliquid funding rates: how hourly funding works and costs

On Hyperliquid, funding is paid every hour. Each hour, traders on one side of a perpetual market pay traders on the other side a small percentage of their position size. When the rate is positive, longs pay shorts. When it is negative, shorts pay longs. Because payments are hourly, the rate is shown as an hourly number, which looks tiny until you convert it into a yearly figure.

Why perpetuals have funding at all

A perpetual future never expires, so nothing forces its price to meet the spot price on a set date. Funding does that job instead. If the perpetual trades above spot because more people want to be long, funding turns positive and longs pay, which makes being long less attractive and pulls the price back. If it trades below spot, funding turns negative and shorts pay. For the general idea across all exchanges, see funding rates explained.

How Hyperliquid's funding differs

• It pays every hour. Binance and Bybit pay every 8 hours on many markets, and every 4 or 1 hour on others. An hourly schedule means smaller, more frequent payments that follow the market more closely.
• It is shown as an hourly rate. A number like 0.0013% is per hour, not per day or per payment window on another exchange.
• It includes a small fixed interest part. Hyperliquid documents this as 0.01% per 8 hours, which works out to 0.00125% an hour, so a market with no premium at all still shows mildly positive funding of roughly 11% a year.
• It is settled on chain, so the rate and every payment are public.

How to annualize an hourly rate

Multiply the hourly rate by 24 to get a day, then by 365 to get a year. Some made-up examples:

• 0.001% an hour × 24 × 365 = about 8.8% a year.
• 0.005% an hour × 24 × 365 = about 43.8% a year.
• -0.002% an hour × 24 × 365 = about -17.5% a year, which means shorts are paying longs.

This is a simple conversion, not a forecast. Funding changes every hour, so nobody actually pays the same rate for a year. The yearly figure is useful because it lets you compare markets, and compare Hyperliquid with exchanges that pay on a different schedule.

What holding a position costs

Funding is charged on the full size of your position, not on the margin you put up. That's the part people miss.

Say you open a $10,000 long with $1,000 of margin, which is 10x leverage, and funding is 0.003% an hour. Each hour you pay $0.30. Over a day that's $7.20, and over a week about $50. That's 5% of your $1,000 margin gone in a week, before fees and before the price has done anything. At 20x on the same margin, the position is $20,000 and the cost doubles.

Compare that with a 1x position: a $1,000 long with $1,000 of margin at the same rate pays about $0.72 a day, under 0.1% of the money. Funding is a small cost for unleveraged traders and a large one for highly leveraged traders who hold for days. That is one reason funding spikes tend to shake out leveraged longs or shorts: staying in becomes expensive.

The flip side is that when funding is on your side, you get paid. A short in a market with strongly positive funding collects every hour, which is the basis of the trades described in funding rate arbitrage.

Typical behaviour and extreme readings

Most of the time, funding on busy markets sits near the baseline, with small moves either side. It climbs when a coin rallies and leveraged traders pile in on the long side, and drops below zero when traders rush to short. Small, thinly traded markets swing much further than Bitcoin or Ethereum.

• Very high positive funding: longs are crowded and paying heavily to stay in. If price stalls, some of them close, and a quick drop can trigger a long squeeze.
• Very negative funding: shorts are crowded. A small rally can force them to buy back, which can spark a short squeeze.
• Funding near the baseline during a big price move: the move isn't being driven by leveraged traders as much, which some read as healthier.

Extreme funding is a sign of crowding, not a timing tool. A crowded trade can stay crowded for days. Pair it with open interest: extreme funding with rising open interest means the crowd is still growing.

How to read funding on sasa

The Funding section on sasa's Data page shows Hyperliquid funding converted to a year's worth for the 80 busiest markets. Two lists sort it for you: 'Longs pay most' shows the most positive markets, 'Shorts pay most' the most negative. A second view compares Hyperliquid with Binance and Bybit predicted funding, already converted to the same yearly basis, and sorts by the biggest gap.

The 'Right now' panel shows average funding a year across Hyperliquid, weighted by volume, so busy markets count more than quiet ones. Funding is also one of the four parts of the Market Fear & Greed reading, with a 25% weight: heavy positive funding pushes the reading towards greed.

If you trade on sasa's Futures page, which offers Hyperliquid markets with up to 20x leverage where available, funding applies to your positions every hour. Leverage can lose your whole position, and nothing here is financial advice.