Funding: the market's scheduled argument about money

Three times a day, the market has a scheduled argument about money.

What a perp is

A perpetual future is a contract that tracks a coin’s price without ever expiring. You can hold a leveraged position in it indefinitely, which is exactly why it needs a mechanism to stop its price drifting away from the real coin.

Funding is the tether

That mechanism is funding. When the perp trades above the spot price, longs pay shorts, which nudges traders toward the cheaper side. When it trades below, shorts pay longs. The payment happens on a schedule, typically every 8 hours, and its size (the funding rate) tells you which side is crowded and how badly. A market where longs are paying heavily is a market where being long has become expensive, and someone is choosing to pay for the privilege.

The clock is part of the signal

Because the payment lands at a known time, behavior changes as that time approaches. A trader facing a painful funding payment in twenty minutes has a reason to close or flip before the clock hits zero that they did not have an hour earlier. Multiply that by everyone on the crowded side and the minutes before settlement become a scheduled squeeze on the same decision. That is why “minutes to funding” is itself a reading in the record, alongside the rate: the same funding number can mean different things at different distances from the clock.

Counted, not assumed

It is a neat story, so we treat it like every other story: scan the record for past minutes where funding was stretched near settlement, and count what followed each one, with the count printed beside every rate. Sometimes the clock matters. The scan tells you when it did, out of how many chances.

For how this reads on the terminal itself, see Open interest, funding & liquidations.

See it live

See stretched funding counted into settlement.

Related: Open interest · The record