Crypto Funding Rates for September 2020

 
-0.013414% -0.07341898% 0.0032% 0.01%
0.01% 0.00109337% 0% 0.01%
0.00089% -0.0312% 0.01%
0.01% -0.0144% 0.01%
0.001405% -0.0432%
0.01% 0.0528%
0.01% 0% -0.0048%
0.01% 0.0096%
0% 0.0272%
0.01% -0.008% 0.01%
0.01% -0.0296%
0.01% -0.0128%
0.01% 0.0296%
0.01% -0.0024%
0.01% 0.0048%
0.01% 0.0024%
0.01% 0.0064%
0.01% -0.0128%
0.028907%
0.01%
-0.0104%
0.01%
0.01%
-0.0264%
-0.112%
-0.078418%
0.01%
-0.0512%
0.01%
0.01%
-0.207311% -0.1864%
0.01% 0.0032%
0.01%
-0.012774% 0.092%
-0.044%
0.01%
0.020935%
0.01%
0.01%
0.01% 0.0408%
-0.0736%
0.01%
0.01%
0.01% -0.0296%
0.01% 0.0064%
0.01%
0.01% -0.048%
-0.2656%
0.084653% 0.0128%
0.01%
0.1456%
0.01%
0.01%
0.01%
-0.027598%
-0.021927%
0.01%
0.01% -0.0168%
0.048284% 0.0208%
-0.061104% -0.0936%
0.01% -0.012%
0.01%
0.01% -0.0288%
-0.0712%
0.01% 0.0056%
-0.0272%
0.014038% -0.0016%
-0.158833%
-0.0072%
0.01%
0.005177%
0.01% -0.0424%
-0.232375%
0.01% 0.024%
0.01%
0.01%
 
0.0062703% 0.04441491% 0.00598496% 0.00220333%
0.01433351% 0.03623062% 0.00024456% 0.02892222%
0.01174644% 0.00549717% 0.04122333%
0.01402003% 0.00558442% 0.02107222%
0.00971159% -0.01597046%
0.011379% 0.01987865%
0.0006705% 6.184E-5% -0.0168479%
0.01218937% 0.01620838%
-0.04238366% -0.04049091%
0.01362277% 0.00299756% 0.02487333%
-0.01466589% -0.0744503%
0.01483442% 0.01074444%
0.00283594% -0.01717127%
-0.00169525% 0.0252736%
0.01505873% 0.01404528%
0.01142796% 0.01726467%
0.01717689% -0.00127802%
-0.0387815% -0.04860169%
0.01815813%
0.00855361%
0.0079787%
0.01%
0.00951363%
0.00814093%
-0.06860364%
-0.11554846%
0.01007377%
-0.02061405%
-0.06964902%
0.01359487%
-0.66057975% -1.31716407%
-0.16267162% -0.2134878%
0.01092862%
-0.09943179% -0.123262%
-0.01604894%
-0.04785453%
0.00946673%
0.01030119%
-0.05522788%
-0.00556254% 0.02065424%
-0.01228959%
0.02525%
-0.00935629%
0.01% 0.02567381%
0.00495843% 0.00139167%
0.01%
0.00033577% -0.03132326%
-0.08202779%
0.01706832% 0.00912449%
0.01068478%
0.03052487%
0.01%
0.00494374%
-0.17734811%
-0.0211265%
-0.00846484%
-0.00494747%
-0.00765483% -0.0439825%
0.00201444% 0.01107476%
-0.12008404% -0.10328076%
0.01023096% -0.11866149%
-0.09483032%
0.00995547% 0.00070549%
-0.12315789%
0.00898657% -0.0099096%
-0.00808421%
0.01569928% 0.019184%
-0.01288249%
0.00211176%
0.00899082%
-0.03889069%
0.0027425% -0.01112905%
-0.12351847%
0.01272522% 0.01939941%
-0.00295028%
0.0094063%

Funding Rates above are normalized to 8 hours.

– 

A feature that all perpetual swap markets have in common is a “funding” rate – an essential tool for futures contracts without expiry dates.

Here we’ll go over what funding rates are, why they’re important, and how they vary between exchanges.

What are funding rates, and why do we need them?

Funding rates are transfer payments made between long and short positions on perpetual swap futures markets. They’re designed to keep contract prices consistent with the underlying asset.

Traditional futures contracts, such as quarterly contracts, settle positions using the underlying asset price at their expiry date. This causes their price to converge to the asset’s spot value over time, until they expire.

Perpetual swap contracts, however, do not have an expiry date to incentivize this convergence. This means that some other mechanism is required to keep the contract price in line with the price of the underlying asset.

This is where funding rates come in.

How funding rates work

Funding rates influence the price of perpetual swap contracts by penalizing or rewarding traders, depending on the nature of their position (long or short). The side of the market benefitting from the funding rate is determined by the difference between the contract price and the price of the underlying asset.

When the contract price is too high – defined as being above spot price- long positions will pay short positions a fee.

Conversely, when the contract price is too low – defined as being below spot price – short positions will pay long positions a fee.

Paying funding rates

Funding rates are applied periodically to open positions held by traders on perpetual swap markets. The rates are applied in proportion to the size of each trader’s position.

The funding rate is adjusted for each period that it is applied, in accordance with any recent gaps between the price of the contracts and the spot price of the asset.

Each exchange has its own method of calculating and applying their unique funding rates, which are most often derived from a time-weighted average of pricing data.

The most significant difference between exchanges is how often they apply their funding rates, which can vary from as long as every 8 hours, to as rapidly as every second.

BitMEX

BitMEX funding rates are charged three times a day, at 8-hour intervals.

This is the industry standard, with most other exchanges either following suit, or at the very least expressing their funding rate as an 8-hour figure (but applying them at a different intervals).

Funding rates on BitMEX are only paid or received by positions that are open at the end of each 8-hour period, giving traders the option to open or close a position accordingly.

Binance Futures

Binance Futures funding rates are also applied every 8 hours to open positions.

Funding rates on Binance tend to be lower on average than those on BitMEX, due to the ease of arbitrage between futures and spot markets. Since Binance offers both types of markets within a single platform, users can very rapidly transfer funds between spot and futures wallets to close the spread.

FTX

FTX funding rates are slightly different to BitMEX and Binance, due to funding payments being charged every hour, rather than every 8 hours.

In the above table, we have normalized the rate by multiplying by 8 to more easily compare funding rates.

dYdX

dYdX has the most unique mechanism of the derivatives exchanges covered here, due to its continuous-funding payment system.

Although dYdX expresses its funding rate as an 8-hour figure (making it easier to compare to other exchanges), funding is charged continuously every second. Unlike most other exchanges, traders on dYdX perpetual swap contracts cannot escape funding rates by strategically closing their positions.

Rather than using 8-hour adjustments, dYdX updates its funding rate every hour. Funding rates on dYdX do not compound.

Summary

Lending rates are required on perpetual swap contracts to keep prices consistent with the underlying asset price.

Traders will either pay or earn a small fee at regular intervals, depending on the price discrepancy between the contract price and the price of the underlying asset. These only apply to positions that are open at the time that funding payments are applied, which varies from exchange to exchange.

Each exchange has its own funding rates and methods of applying them.

Funding Rate FAQ

Why do we need funding rates?

Perpetual swap futures contracts require a mechanism to keep their price in line with the true price of the underlying asset. Traditional futures contracts fulfill this by having an expiry date, however, perpetual futures do not expire.

A funding rate provides a solution to this problem.

Does the exchange take a fee from funding rates?

Exchanges generally do not take any fees from funding payments. They are usually transferred peer-to-peer, directly between open long and short positions.

Why do funding rates always change?

Funding rates are constantly adjusted in order to influence the contract price in the correct direction and magnitude. A larger disparity in price requires a larger funding rate.

Can funding rates be negative?

Yes, negative funding rates apply when the contract price is significantly below spot price. This results in short positions paying long positions the funding fee.

Will I be subject to the funding rate if I close my position before funding time?

You will not pay or receive funding rates if your position is closed before the time that the rate is applied. The frequency at which funding rates are charged or credited varies from exchange to exchange.

dYdX perpetual swaps are an exception to this rule since it applies its funding rate continuously on a per-second basis.
 

How often are funding rates applied?

Funding rates are applied at different intervals for each exchange. Check your exchange for its individual funding rate rules.