2026-09-05

Funding rate: who pays whom, and why it is not yield

A perpetual has no expiry date. Funding is the mechanism that keeps its price from drifting away from the index — every few hours, one side of the market pays the other. It is a transfer between traders. It is not something OFFCODE pays you, and it is not a return.

The mechanism, in one paragraph

When the perpetual trades above the index, longs pay shorts. When it trades below, shorts pay longs. The payment is a small percentage of your position's notional — not of your margin — and it is debited from or credited to your margin at each funding interval. The rate is set by the market, not by us; it shows up per instrument in the terminal and lands in the futures account statement.

Why the notional is the number that matters

Funding is charged on the full size of the position. At 20x leverage, 100 USDT of margin controls 2,000 USDT of notional — and funding is a percentage of the 2,000, not of the 100. Leverage multiplies your funding bill exactly as it multiplies your PnL.

"Annualised funding" is arithmetic, not a forecast

Multiply the current rate by a year of intervals and you get a big number. That number assumes the rate holds for a year, and funding does not hold: it flips sign, collapses to nothing, and spikes hardest exactly when the market is moving against the crowded side — which is usually your side, if you took the position to collect funding.

A "funding farm" is a leveraged directional position wearing a different name. One adverse move liquidates it and takes in minutes what funding would have paid over months.

What to check before you open

• Current and historical funding for that specific market — it is per instrument, in the terminal, not a platform-wide number.
• Your liquidation price at the leverage you actually chose.
• The round trip: on OFFCODE, futures cost 2% of margin on open and 2% on close. 100 USDT of margin in and out is 4 USDT in house fees before funding touches anything — see Fees.

Measured on 2026-09-05 against the live API. Nothing here is investment advice — read the Risk Disclosure.

←