# Perpetual Futures Funding ⎊ Area ⎊ Resource 2

---

## What is the Mechanism of Perpetual Futures Funding?

This periodic payment system is engineered to anchor the price of a perpetual futures contract to the prevailing spot price of the underlying cryptocurrency. The exchange algorithm calculates the rate based on the deviation between the futures index and the spot reference rate. This continuous adjustment prevents long-term divergence between the two instruments.

## What is the Incentive of Perpetual Futures Funding?

The payment structure creates a direct financial incentive for traders to close the basis gap between the perpetual and spot markets. When the perpetual trades at a premium, longs pay shorts, encouraging short selling and driving the perpetual price down toward spot parity. Conversely, a discount incentivizes the opposite flow.

## What is the Rate of Perpetual Futures Funding?

The calculation aggregates the net difference between the long and short open interest weighted by the prevailing market premium or discount. This rate is typically exchanged every eight hours, though the frequency can vary by platform.


---

## [Cost of Carry Calculation](https://term.greeks.live/term/cost-of-carry-calculation/)

## [Futures Price](https://term.greeks.live/term/futures-price/)

## [Perpetual Swaps Funding Rates](https://term.greeks.live/term/perpetual-swaps-funding-rates/)

## [Gas Fee Futures](https://term.greeks.live/term/gas-fee-futures/)

## [Perpetual Funding Rates](https://term.greeks.live/term/perpetual-funding-rates/)

## [Perpetual Futures Hedging](https://term.greeks.live/term/perpetual-futures-hedging/)

## [Dynamic Funding Rates](https://term.greeks.live/term/dynamic-funding-rates/)

## [Dynamic Funding Rate](https://term.greeks.live/term/dynamic-funding-rate/)

## [Decentralized Funding Rate Index](https://term.greeks.live/term/decentralized-funding-rate-index/)

## [Funding Rate Options](https://term.greeks.live/term/funding-rate-options/)

## [Funding Rate Futures](https://term.greeks.live/term/funding-rate-futures/)

## [Funding Rate Spikes](https://term.greeks.live/term/funding-rate-spikes/)

## [Funding Rate Modeling](https://term.greeks.live/term/funding-rate-modeling/)

## [Funding Rate Stress](https://term.greeks.live/term/funding-rate-stress/)

## [Funding Rate Mechanics](https://term.greeks.live/term/funding-rate-mechanics/)

## [Perpetual Swap Funding Rate](https://term.greeks.live/term/perpetual-swap-funding-rate/)

## [Implied Funding Rate](https://term.greeks.live/term/implied-funding-rate/)

## [Funding Rate Adjustments](https://term.greeks.live/term/funding-rate-adjustments/)

## [Futures Margining](https://term.greeks.live/term/futures-margining/)

## [Perpetual Futures Markets](https://term.greeks.live/term/perpetual-futures-markets/)

## [Perpetual Swap Funding Rates](https://term.greeks.live/term/perpetual-swap-funding-rates/)

## [Perpetual Options Funding Rates](https://term.greeks.live/term/perpetual-options-funding-rates/)

## [Real-Time Funding Rates](https://term.greeks.live/term/real-time-funding-rates/)

## [Forward Funding Rate](https://term.greeks.live/term/forward-funding-rate/)

## [Adaptive Funding Rate Models](https://term.greeks.live/term/adaptive-funding-rate-models/)

---

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```


---

**Original URL:** https://term.greeks.live/area/perpetual-futures-funding/resource/2/