# Funding Rates

## Funding Rates

Funding keeps perp prices anchored over time. Funding is **peer-to-peer**: it transfers value between longs and shorts.

CASH funding aims to reflect margin loan economics at retail brokers (e.g., Robinhood) at around 5.5% per year as default, though this fluctuates with demand and supply.

When the market is in off hours, CASH hard caps the max funding rate at +- 5.5% annually.

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### What funding is

Funding is a periodic payment based on whether the perp is trading rich or cheap vs the oracle price. This is typically driven by temporary supply and demand dynamics for leverage.

Typical interpretation:

* Perp **above** oracle→ funding **positive** → **longs pay shorts**
* Perp **below** oracle → funding **negative** → **shorts pay longs**

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### Examples

For a 100,000 USDT notional position:

* at +5 bps/hour → pays **100,000 × 0.0005 = 50 USDT/hour**
* at −3 bps/hour → receives **100,000 × 0.0003 = 30 USDT/hour**

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### Practical tips

* Funding can dominate PnL for longer holds.
* Check “next funding” before holding high leverage through Off Hours.