Funding

Funding rate mechanics.

Overview

Funding keeps the perp aligned with the oracle through periodic peer-to-peer transfers. When the perp trades above the oracle, longs pay shorts; when it trades below, shorts pay longs. Funding is paid hourly on the mark/index spread and settles to each position holder’s margin balance every hour.

Technical Details

Parameter	Value
Interval	Hourly
Cadence	Hyperliquid standard
Cap	±4% / hour
Impact notional	1,000

The funding rate follows the Hyperliquid formula:

$$F = 0.5\,\big[\,P + \text{clamp}(r - P,\, -0.0005,\, 0.0005)\,\big]$$

where:

• $P$ = average premium index = impact_price_difference / oracle_price
• $r$ = interest rate
• impact_price_difference = max(impact_bid − oracle, 0) − max(oracle − impact_ask, 0)

The funding payment is:

$$\text{payment} = \text{position size} \times \text{oracle price} \times F$$

Off-Hours Funding

When the external assessment is dark, the oracle holds the last print while the perp continues to trade. Funding does the work of closing the gap: as the perp mark drifts from the held anchor, the premium widens and funding flows from the rich side to the cheap side. On reopen, any remaining dislocation pays through funding rather than through liquidations.