Where the funding rate comes from
A perpetual future is a contract with no expiry date. Since there is no expiry, something must keep its price tethered to spot. That something is funding: every few hours one side pays the other.
The logic is simple. If the future trades above spot, longs dominate and they pay the shorts. If it trades below, shorts pay. The size of that payment is the funding rate — the stronger the imbalance, the larger it gets.
The interval is usually eight hours, but exchanges shorten it to four or even one hour on volatile coins. We account for that: rates over different intervals are not directly comparable, and annualising them requires the payout frequency.
The delta-neutral pair
The rate alone does not make money: holding only a long earns funding but exposes you to the full price move. The solution is two opposite positions of equal size on different exchanges — long where funding is negative (you get paid) and short where it is positive (you get paid there too).
The result: if the coin rises, the long's profit offsets the short's loss, and vice versa. Price stops mattering and what remains is the sum of the two rates. That is a delta-neutral position.
Reading the page
The top row holds four numbers: the best APR among the pairs found, how many pairs passed your filter, how many exchanges are responding, and how long until the next payout. That last one matters more than it looks — funding is credited only to whoever holds the position at settlement.
Each row in the table is a ready-made pair. The LONG column shows the exchange with the most favourable (negative) rate, SHORT the one with the highest positive rate. Next to each rate sits its interval and the time of the next payout.
Then come the per-period spread, the APR and projected income over 24 hours, 7 and 30 days. Read that projection carefully: it assumes the rate stays put. In reality rates change every period, and an APR in the thousands almost never survives more than a few hours.
Settings
The filters set position size, minimum APR and trading fee. The fee is deducted four times — entry and exit on each of the two exchanges. On modest rates that is what decides whether any profit survives.
What eats the return
- Fees. Four trades per round trip: at 0.05% that is 0.2% of position size.
- Liquidation risk. The two positions live on separate exchanges. A sharp move can liquidate the short on one while the long survives on the other, and neutrality disappears. Hence low leverage and generous margin.
- Rate changes. The rate that drew you into the trade can be zero, or flipped, by the next payout.
- Spread and slippage on entry, especially on illiquid coins.
Why small coins show four-digit APRs
Enormous rates always signal an imbalance in an illiquid market. Small size moves the price there, and opening a position of the size you want is often simply impossible — the book is not deep enough. On top of that, the rate lasts exactly until the imbalance corrects, sometimes a single period.
The practical conclusion: rows showing thousands of percent are useful as a market indicator, but workable routes usually sit lower — on coins with decent volume and APRs in the tens of percent.
How to proceed
Pick a pair with sensible volume, run it through the funding calculator with your fee and leverage, open both legs at roughly the same time, and watch your margin. Hold while the rates stay in your favour and close as soon as the difference fades.