Educational content only. Not financial advice. Trading crypto carries risk, including total loss.
What a perpetual future actually is
A traditional futures contract has an expiry date, after which it settles. A perpetual future has no expiry — positions can be held indefinitely. Nobody holds the underlying asset; the contract is purely synthetic exposure to its price. Because there is no expiry to force the contract's price back in line with spot, exchanges need another mechanism to keep the two from drifting apart, and that mechanism is funding.
How the funding rate keeps price in line
Periodically — commonly every eight hours, though this varies by venue — a payment is exchanged directly between traders holding long positions and traders holding short positions. When the perpetual's price trades above spot, longs typically pay shorts, which makes holding a long slightly more expensive and holding a short slightly more attractive, nudging demand back toward balance. When the perpetual trades below spot, the payment runs the other way. Nobody outside the two sides of the trade receives this payment — it moves between traders, not to the exchange.
Funding cost calculator
Enter a position size, a funding rate per eight-hour interval, and a holding period to see an estimated transfer. This is arithmetic only, using a rate supplied by the visitor — never a live number.
Why this matters even without a position
Funding rates are also a rough sentiment gauge: persistently positive funding usually means more traders are long than short and are paying for the privilege, which can hint at crowded positioning. None of that is a trading signal on its own, and GaurdWallet does not offer perpetual futures today — this page is educational groundwork, not a description of a current product feature. See spot vs perpetual futures for how this compares to simply holding the asset.