Funding — is like a commission that traders pay each other when trading futures with leverage. If the futures price significantly differs from the actual #cryptocurrency!!! price, funding helps align them.
Traders whose bets don't match the general market direction pay funding, while those whose bets align receive it. It acts as a penalty or bonus for traders depending on their positions.
Thus, funding in #crypto acts as an incentive for traders to align their trading strategies with the general market trend.
📈 If the market is generally going up and you hold a long position (i.e., betting on the rise), you will most likely receive funding.
📉 If the market is falling and you hold a short position (betting on the decline), you will also likely receive funding.
This mechanism regulates to prevent excessive speculation and a too large gap between the futures price and the real cryptocurrency price. Ultimately, funding helps make trading fairer and more tied to actual market conditi...
