Hyperliquid Funding Rate
In one sentence
On Hyperliquid, a positive funding rate means longs pay shorts, and a negative funding rate means shorts pay longs. Funding is charged every hour and it moves directly between traders, with no fee taken by the exchange.
On Hyperliquid, a positive funding rate means the perpetual is trading above the oracle spot price, so long positions pay short positions. A negative funding rate means the perpetual is trading below the oracle spot price, so short positions pay long positions. The payment is applied every hour to the balance of every open position, and it is transferred between traders rather than collected by the exchange.
How often funding is charged
Hyperliquid charges funding hourly. The rate formula produces an 8 hour rate, and one eighth of it is charged each hour, which keeps the mechanism comparable to centralized venues that settle every 8 hours while spreading the cost far more evenly. There is no snapshot moment to dodge: if your position is open at the funding interval, you pay or you receive. The interval and the funding cap are the same for every asset on the venue.
Where the money actually goes
The Hyperliquid documentation is explicit that funding is purely peer to peer and that no fees are collected on the payments. The exchange takes nothing, there is no insurance fund cut, and there is no protocol treasury skim. Every dollar a long pays is a dollar a short receives on the same market.
Because margin state lives in HyperCore rather than in an off-chain matching engine, each hourly debit and credit is applied in chain state. Your complete funding history for an address is retrievable from the public API, so the cost of holding a position is auditable after the fact rather than something you have to reconstruct from a CSV export.
How the rate is calculated
The rate combines a premium component, which measures how far the order book sits from the oracle price, and a fixed interest component. The difference between them is clamped so the interest component cannot dominate when the premium is large.
The interest component is fixed at 0.01% every 8 hours, which is 0.00125% per hour, described in the docs as 11.6% APR paid to the short side. That is the baseline: if the perp trades exactly at the oracle price, the premium is zero and longs still pay shorts that small interest component.
The premium is derived from impact prices, not the top of the book. Hyperliquid takes the average execution price of a fixed notional trade on each side (20,000 USDC for BTC and ETH, 6,000 USDC for every other asset) and compares it to the oracle price. That value is sampled every 5 seconds and averaged over the hour, so a single wick or a thin quote cannot move the rate much on its own.
- Premium = impact price difference / oracle price, sampled every 5 seconds and averaged hourly.
- The clamp on the interest minus premium term is plus or minus 0.05% on the 8 hour basis.
- Funding is capped at 4% per hour, which the docs describe as less aggressive capping than centralized counterparts.
- Oracle prices are computed by each validator as a liquidity-weighted median of CEX spot prices.
What funding actually costs
Payment size is position size multiplied by the oracle price multiplied by the funding rate. Note that the spot oracle price is what converts your position into notional value, not the mark price, so a perp trading at a wide premium is still charged on the spot-based notional.
Take an illustrative example with round numbers: a $10,000 long, held while funding runs at a steady +0.01% per hour.
- Per hour: $10,000 x 0.0001 = $1.00 paid to the short side.
- Per day: about $24.
- Per week: about $168, which is 1.68% of the position.
- At +0.05% per hour instead, the same position pays $5 per hour, $120 per day, and 8.4% of the position over a week.
That last line is the one that catches traders. At +0.05% per hour, the asset has to appreciate more than 1.2% per day just to break even on carrying cost. Direction can be right and the trade can still lose, which is why funding deserves the same attention as your liquidation price.
What is different from a centralized exchange
- Settlement is hourly rather than every 8 hours, so cost accrues in smaller and more visible increments.
- The cap is 4% per hour, deliberately looser than typical CEX caps, so extreme positioning is allowed to express itself in the rate.
- No fee is taken on the payment. It is strictly a transfer between the two sides of the market.
- The reference price is a validator-computed median of CEX spot prices, and the notional for the payment uses that oracle price rather than the mark price.
- Order book and margin state sit in HyperCore, so funding history for any address can be read from the public API.
How to reduce what you pay
- Check the current rate before opening, not after. A crowded side is usually already expensive.
- Take the other side of the crowd when the premium is extreme, and you receive funding instead of paying it.
- Hedge with spot: long spot against a short perp earns positive funding while staying flat on price.
- Shorten holding time on high-funding assets, since the cost is linear in hours held.
- Set an alert on the rate so an expensive regime reaches you before it has drained the position for a full day.
How Otomato monitors it
Paste your address and Otomato detects your open Hyperliquid perps automatically, with no wallet connection and no signature. It is the most precise and complete portfolio assistant, alerting on every event linked to your positions, funding included. You get told on Telegram or in the mobile app when funding on a position you actually hold turns expensive, instead of finding out when you close the trade and the numbers do not add up.
Work out exactly what a position costs you per hour, per day, and per week at a given funding rate.
Funding rate calculator →Frequently asked questions
Does positive funding mean longs pay shorts on Hyperliquid?
Yes. A positive funding rate means the perpetual is trading above the oracle spot price, and long positions pay short positions. When the rate is negative the perpetual is trading below the oracle price and short positions pay long positions.
How often does Hyperliquid charge funding?
Every hour. The formula produces an 8 hour rate and one eighth of it is charged each hour, so any position open at the funding interval is debited or credited. The interval is the same for every asset.
Where do Hyperliquid funding payments go?
Directly to the traders on the other side. Funding on Hyperliquid is purely peer to peer and no fees are collected on the payments, so the exchange receives nothing. Because margin state lives in HyperCore, the payments are applied in chain state and the full funding history for an address can be read from the public API.
How is the Hyperliquid funding rate calculated?
Funding Rate = Average Premium Index + clamp(interest rate - Premium Index, -0.0005, 0.0005) on an 8 hour basis. The interest component is fixed at 0.01% per 8 hours, and the premium comes from impact bid and ask prices versus the oracle price, sampled every 5 seconds and averaged over the hour. Funding is capped at 4% per hour.
How do I avoid paying high funding?
Check the rate before you open rather than after, avoid the crowded side when the premium is extreme, hedge with spot so you receive funding instead of paying it, and keep holding time short on assets with elevated rates. Setting an alert on the funding rate of positions you already hold is the reliable version, since funding regimes change within hours.
Is the funding payment based on the mark price?
No. The payment is position size multiplied by the oracle price multiplied by the funding rate. Hyperliquid uses the spot oracle price to convert your position into notional value, not the mark price.
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