# How does funding work on Hyperliquid?

Stage 1 · Survey the ground (know the market you trade) · Updated 2026-10-17

Funding is a payment between traders that keeps a perpetual’s price close to the spot price. On Hyperliquid it is paid every hour, at one eighth of an eight-hour rate built from the premium over the oracle plus a small interest part. When the rate is positive, longs pay shorts; when negative, shorts pay longs. The exchange takes no cut.

## In short

- Funding is paid **every hour**, from one side of the market to the other. Hyperliquid takes no fee from it.
- The eight-hour rate is premium + clamp(0.01% − premium, −0.05%, 0.05%), paid one eighth at a time.
- Positive means longs pay shorts; negative means shorts pay longs. While the premium stays small, the rate is exactly 0.01% per eight hours, paid by longs.
- Each payment is size × oracle price × hourly rate, and it changes the equity behind the position, so it moves liquidation over time.
- Compare rates over the same period: 0.01% an hour is 0.08% per eight hours and 0.24% a day.

## What funding is for

A perpetual is a future that never expires, so no settlement date pulls its price back to the coin’s spot price. Funding does that job instead. When the perpetual trades above spot, holding a long costs money and holding a short earns it, which pays traders on both sides to close the gap. When it trades below spot, the payments run the other way.

Spot here means the **oracle price**: a weighted median of the coin’s price on several large exchanges, published by Hyperliquid’s validators about every three seconds. It does not depend on Hyperliquid’s own order book at all, which is the point: the perpetual is measured against a price it cannot move.

Funding is paid between traders. Hyperliquid takes nothing from it: every dollar a long pays, a short receives.

## How the rate is set

The rate has two parts. The **premium** measures how far the perpetual sits from the oracle: every five seconds Hyperliquid works out the average price of buying and of selling a set amount against its own book, compares it with the oracle, and averages those readings over the hour. The **interest part** is fixed at 0.01% per eight hours, the cost of holding dollars rather than the coin.

They combine as premium + clamp(0.01% − premium, −0.05%, 0.05%), an eight-hour figure. The clamp is what keeps funding quiet most of the time: as long as the premium stays between −0.04% and +0.06%, the rate comes out at exactly 0.01% per eight hours, paid by longs. Only a larger premium moves it.

Markets launched by outside deployers under HIP-3 measure the premium from the middle of the bid and ask for that set amount instead, so read their rate on its own rather than assuming it matches the main markets.

## How each payment is worked out

Hyperliquid pays funding every hour, on the hour, at one eighth of the eight-hour rate. Each payment is size × oracle price × hourly rate: the oracle price, not the mark price and not your entry. A position of 200 units with the oracle at 100.00 pays or earns $2.00 an hour at a rate of 0.01%.

A positive rate means longs pay shorts; a negative rate means shorts pay longs. However far the premium runs, the rate is capped at 4% an hour, and the cap is the same on every market.

Funding settles into the margin behind the position. Paying it lowers that equity and receiving it raises it, so funding moves your liquidation price over time. Hyperliquid’s own liquidation page says the same: the price shown when you open is exact for the entry, but funding can shift where liquidation actually lands. On an isolated position held for days, look at the liquidation line again. [How liquidation works](https://buildtrade.app/guides/how-liquidation-works-on-hyperliquid/) explains what sets it.

## What funding costs over days

Funding adds up like rent. An hourly rate looks too small to matter, but it is charged 24 times a day and 168 times a week. In the worked example below, a rate of 0.01% an hour costs as much as the stop in about 4.2 days, and the interest part alone does so in about 33.

Compare rates over the same period. Hyperliquid quotes the hourly rate; many other venues quote an eight-hour one, and some traders quote a yearly figure. 0.01% an hour is 0.08% per eight hours and 0.24% a day.

## What the rate does not tell you

A high rate says longs are paying to hold, right now. It does not say which way price goes next: crowded positions can stay crowded for days, and the rate itself can change within hours as the premium moves. Read it as part of a trade’s arithmetic, a cost or an income for as long as you expect to hold, not as a forecast.

## Seven days of funding, three rates

_Example numbers._

A long of 200 units with the oracle at 100.00, so the position is worth $20,000, and a stop one point below that would lose $200. The first rate is the interest part alone, what the position pays while the premium is small; the other two are higher, for comparison. A short of the same size would receive the same amounts.

- Size, in units: 200
- Position value: $20,000
- Loss at the stop: −$200

| Hourly rate | Per hour | Per day | Per week | Days to equal the stop |
| --- | ---: | ---: | ---: | ---: |
| 0.00125% | $0.25 | $6 | $42 | 33.3 |
| 0.005% | $1.00 | $24 | $168 | 8.3 |
| 0.01% | $2.00 | $48 | $336 | 4.2 |

At the 4% cap, the most one hour can charge, the same position would pay $800 in a single hour: 4 times what the stop would lose.

## Mistakes that cost traders money

- **Reading the hourly figure as the whole cost.** The rate is charged every hour the position is open: 24 times a day, 168 times a week. Multiply before deciding it is small.
- **Comparing rates quoted over different periods.** An hourly rate next to an eight-hour one looks eight times cheaper. Put both on the same period first.
- **Treating the rate as a forecast.** A high rate says one side is paying to stay in. Crowded positions can stay crowded, and the rate can turn within hours.
- **Forgetting that funding moves liquidation.** Every payment changes the equity behind the position. On an isolated position held for days, the liquidation price drifts with it.
- **Thinking funding is a fee.** Hyperliquid takes nothing from it. Whatever one side pays, the other side receives.

## Try it in BuildTrade™

Open any perpetual on the Trade screen. The market bar shows Funding, the current hourly rate, with a countdown to the next payment; the Funding 8h column in the pair list is the same rate times eight. Paper trading does not charge funding, so add it to the plan yourself: hourly rate × position value × hours held. On a live account, the Funding tab under the chart lists every payment.

Open the app: https://trade.buildtrade.app/register

## Sources

- [Funding](https://hyperliquid.gitbook.io/hyperliquid-docs/trading/funding), Hyperliquid Docs.
- [Liquidations](https://hyperliquid.gitbook.io/hyperliquid-docs/trading/liquidations), Hyperliquid Docs.
- [Robust price indices](https://hyperliquid.gitbook.io/hyperliquid-docs/trading/robust-price-indices), Hyperliquid Docs.

BuildTrade™ is independent of, and not endorsed by, Hyperliquid.

Web page: https://buildtrade.app/guides/how-funding-works-on-hyperliquid/