Ever wondered what a funding rate is? It is the payment that keeps perpetual futures tied to the spot price.

Perpetual contracts never expire, so there is no expiry date to pull their price back to spot. Instead, traders pay each other, usually every eight hours.

When the rate is positive, longs pay shorts. When it is negative, shorts pay longs. The payment goes between traders, not to the exchange.

A high positive rate often means the crowd is heavily long, so it is worth checking before opening a leveraged position. #Crypto