What is Funding Rate?
Perpetual funding rates are periodic payments exchanged between long and short holders of perpetual futures contracts, designed to keep the perpetual price anchored to spot. When funding is positive, longs pay shorts — signalling bullish leveraged crowding. When negative, shorts pay longs — often during capitulation or heavy hedging flow. Sharpe tracks funding rates across 13 major exchanges (Binance, Bybit, OKX, Deribit, Hyperliquid, Gate.io, Bitget, KuCoin, MEXC, HTX, BingX, CoinEx, BitMEX) with each rate normalized to annualized APR so you can compare 1-hour rates from Hyperliquid against 8-hour rates from Binance directly.
How to use Funding Rate
Use funding rate as three signals. First, as a sentiment indicator: persistent 8-hour rates above 0.03% (~33% APR) often precede corrections as longs crowd. Second, as a carry opportunity: hold long spot + short perp to collect the funding while staying delta-neutral (see /arbitrage/calculator). Third, as a cross-exchange divergence signal: when Binance funding diverges meaningfully from Hyperliquid or OKX on the same asset, the positioning asymmetry often precedes volatility expansion.