The short answer
Funding is a small payment exchanged between longs and shorts every hour. It replaces the overnight swap you know from CFDs, with two differences: it settles hourly instead of daily, and it flows in both directions, so you sometimes receive it.
Funding moves your equity, which means it counts toward your drawdown rules like any other gain or loss.
Why funding exists
A regular future has an expiry date that forces its price back to the real asset's price. A perp never expires, so something else has to keep the contract glued to the underlying. That something is funding:
When the perp trades above the underlying's price, longs pay shorts. Being long gets slightly expensive, being short gets slightly rewarded, and the pressure pushes the price back down.
When the perp trades below, shorts pay longs, and the pressure works the other way.
Funding is paid between traders. Neither we nor Hyperliquid take a cut of it.
How it settles
Once an hour, every open position pays or receives funding based on its current value:
funding payment = position value × the funding rate for that hour
Position value is measured at the oracle price, the reference price of the underlying. The payment lands directly in your balance, and each position shows its running total, so you always know what a trade has paid or earned. A position opened and closed between two settlements pays nothing.
Funding counts toward your drawdown
This is the part that matters on a funded account. Funding is not a separate line item sitting outside your P&L. It moves your balance and therefore your equity, and your equity is what the drawdown engine watches.
Funding you pay reduces your equity and moves you closer to your daily drawdown level and your drawdown floor.
Funding you receive increases your equity, and counts as profit toward your target and your payout, on the day it settles.
Because it settles hourly, a large position left open over a weekend can accumulate a meaningful amount of funding while you are not watching.
It is rarely the thing that breaches an account, but it is never nothing. Treat it as a real cost of carry.
How big is it?
Usually small. In a calm market the rate sits near its baseline of 0.00125% per hour, which is about 0.01% per 8 hours, the figure quoted on most crypto exchanges. It rises when a market gets one-sided. In an extreme squeeze it is capped at 4% per hour, but rates anywhere near that cap are rare and short-lived.
A worked example
You are long 0.5 BTC at a BTC price of $110,000, so your position value is $55,000.
Held for | Funding at the 0.00125% per hour baseline |
1 hour | you pay $0.69 |
24 hours | you pay about $16.50 |
7 days | you pay about $115 |
At that baseline you would pay roughly 11% a year to stay long, in the same ballpark as swap costs on a crypto CFD. The difference is that the rate moves with sentiment. If the market turns bearish and the perp trades below the underlying, the same long position starts collecting funding instead of paying it.
Funding vs swap
Swap (CFDs) | Funding (perpetuals) |
Charged once a day at rollover | Settled every hour |
Tripled on Wednesday | The same rule every hour of every day |
Almost always a cost | A cost or an income, depending on how the market is positioned |
Set by the broker | Set by the market, and visible on every symbol before you trade |
Before you hold for days
Check the symbol's current funding rate in the platform. For a quick trade it barely matters. For a position you plan to keep all week, a persistently high rate is a real cost worth writing into your plan, and a persistently negative one is a small tailwind.
Where to go next
Read What is Hyperliquid? for where the oracle price comes from, Markets never close: trading 24/7 for what an always-open market does to a multi-day hold, and Upcomers Perpetuals programs: complete rules and overview for the drawdown rules funding feeds into.
Need help?
Contact Upcomers support through live chat, the help center, or at [email protected].