Funding is the cost of holding a perpetual futures position that nobody mentions when you open it. It's charged every few hours, it's small each time, and it's calculated on the whole position, not on your margin. Over weeks it can cost more than the trading fees.
To put real numbers on it, we pulled every funding settlement on Binance's BTCUSDT, ETHUSDT and SOLUSDT perpetuals for one year: 1 November 2025 to 31 October 2026, 1,095 settlements per contract. Here is what it cost, and how to work it out for your own position.
How funding works
A perpetual contract never expires, so something has to keep its price close to the spot market. Funding does that. At fixed times, traders on one side pay traders on the other:
- Positive rate: longs pay shorts. It happens when the perpetual trades above the index price, usually because more traders want to be long.
- Negative rate: shorts pay longs.
The exchange doesn't keep the money; it moves between traders. Binance settles every 8 hours by default, at 00:00, 08:00 and 16:00 UTC, and the amount is:
funding amount = position notional × funding rate
position notional = mark price × position size
On Binance the rate is built from a premium index (how far the perpetual trades from the index) plus an interest component that defaults to 0.01% per 8 hours. When the premium stays in a narrow band around zero, the funding rate equals that 0.01% base. Some contracts settle every 4 hours or every hour instead, and Binance can change the interval when rates hit their caps, so check the contract page before you trade.
One year of funding, in numbers
| 1 Nov 2025 to 31 Oct 2026 | BTCUSDT | ETHUSDT | SOLUSDT |
|---|---|---|---|
| Settlements | 1,095 | 1,095 | 1,095 |
| Average rate per 8 hours | 0.0032% | 0.0023% | −0.0003% |
| Sum over the year (cost to a long) | +3.47% | +2.51% | −0.31% |
| Settlements where longs paid | 77.3% | 73.6% | 55.3% |
| Highest single rate | 0.0100% | 0.0100% | 0.0100% |
| Lowest single rate | −0.0152% | −0.0365% | −0.0692% |
The context matters. This was a falling year for all three coins: BTC's mark price went from about 109,600 to 77,600, ETH from 3,850 to 2,250, SOL from 187 to 96. No settlement went above the 0.01% base on any of the three, and most sat below it. In a strong bull market, funding can run far higher than this for weeks. So read the table as one real year, not as a typical one.
What that means for a position
Take a 10,000 USDT long held for the whole year at a constant size:
| Contract | Funding paid by the long | Per 30 days, on average |
|---|---|---|
| BTCUSDT | 347.20 USDT | 28.54 USDT |
| ETHUSDT | 250.85 USDT | 20.62 USDT |
| SOLUSDT | −30.86 USDT (received) | −2.54 USDT |
A short of the same size would have received what the long paid, before fees.
Now the part that catches people out. Funding is charged on the notional, so leverage multiplies it relative to your margin. If those 10,000 USDT of BTC were opened with 1,000 USDT of margin at 10× leverage, the 347.20 USDT of funding is 34.7% of the margin over the year. In isolated margin that money comes out of the position's margin, so the liquidation price slowly moves closer.
Compared with trading fees: at 0.05% per side, a round trip costs 0.10% of the notional. BTC funding averaged about 0.0095% a day over the year, so roughly ten and a half days of holding cost as much as one round trip of those fees.
Month by month
Sum of funding rates in each month, which is the cost to a long held at constant size (negative means longs received):
| Month | BTC | ETH | SOL |
|---|---|---|---|
| Nov 2025 | 0.45% | 0.42% | −0.06% |
| Dec 2025 | 0.42% | 0.36% | 0.25% |
| Jan 2026 | 0.46% | 0.41% | 0.18% |
| Feb 2026 | −0.06% | −0.31% | −1.03% |
| Mar 2026 | −0.09% | −0.09% | −0.50% |
| Apr 2026 | −0.18% | −0.14% | −0.01% |
| May 2026 | 0.23% | 0.29% | 0.05% |
| Jun 2026 | 0.20% | 0.05% | −0.38% |
| Jul 2026 | 0.57% | 0.35% | 0.19% |
| Aug 2026 | 0.62% | 0.48% | 0.39% |
| Sep 2026 | 0.45% | 0.40% | 0.26% |
| Oct 2026 | 0.41% | 0.28% | 0.35% |
The worst 30 days for a BTC long cost 0.63% of the notional (from 6 August 2026); for ETH 0.51% (from 8 August) and for SOL 0.46% (from 29 July). The best 30 days for a SOL long paid it 1.10% (from 30 January 2026), during a sell-off when shorts were crowded.
How to estimate funding before you trade
cost per settlement = notional × rate
cost over a hold = notional × rate × settlements per day × days
At a steady 0.01% every 8 hours, a 10,000 USDT position pays 1 USDT per settlement, 3 USDT a day and about 90 USDT a month. The crypto funding rate calculator does this for any rate, interval and holding time. The current rate and a countdown to the next settlement are shown on each contract's trading page.
Pull the history yourself
The funding history is public. This short script uses the ccxt library (pip install ccxt) and reproduces the BTC figures above:
import ccxt
ex = ccxt.binanceusdm() # Binance USDⓈ-M futures, public data
since = ex.parse8601("2025-11-01T00:00:00Z")
end = ex.parse8601("2026-11-01T00:00:00Z")
rates = []
while since < end:
batch = ex.fetch_funding_rate_history("BTC/USDT:USDT", since=since, limit=1000)
batch = [r for r in batch if r["timestamp"] < end]
if not batch:
break
rates += batch
since = batch[-1]["timestamp"] + 1
total = sum(r["fundingRate"] for r in rates)
paid = sum(1 for r in rates if r["fundingRate"] > 0)
print(f"{len(rates)} settlements, sum {total:.4%}, longs paid in {paid / len(rates):.1%} of them")
print(f"a 10,000 USDT long held at constant size paid {10_000 * total:,.2f} USDT")
It prints 1,095 settlements, a sum of 3.4720% and 347.20 USDT. Change the symbol to ETH/USDT:USDT or SOL/USDT:USDT for the other two.
Spot or perpetual for a long hold?
Spot has no funding and no liquidation, but it ties up the full amount. A perpetual frees up capital and lets you short, and in exchange you pay or receive funding and accept a liquidation price. For a position held for months, the year above shows funding ranging from a small income (SOL) to about 3.5% of the notional (BTC), on top of fees. That's arithmetic, not advice: the right choice depends on what you're doing with the position.
If you trade perpetuals with leverage, size from your stop first and check where liquidation sits. Our guide to crypto futures position sizing and liquidation prices walks through it, and the crypto liquidation calculator gives a quick estimate.
Sources
- Binance Support, "Introduction to Binance Futures Funding Rates": settlement times, the funding amount formula, the 0.01% interest component and interval changes.
- Binance USDⓈ-M futures public API, funding rate history for BTCUSDT, ETHUSDT and SOLUSDT, 1 Nov 2025 to 31 Oct 2026 (retrieved 10 Nov 2026).
Backtest with funding included
Funding is one of the costs most backtests leave out. Edgoro's Backtest Lab tests crypto strategies on real exchange data with fees and slippage, and the crypto bot builder writes the Python bot once you're happy with the rules.
Past funding rates don't predict future ones. This article is for education and isn't investment advice. Leveraged trading can lose more than you expect.
Frequently asked questions
What is a funding rate in crypto?
It is a periodic payment between traders of a perpetual futures contract that keeps its price close to the spot index. When the rate is positive, longs pay shorts; when it is negative, shorts pay longs. Binance settles every 8 hours by default.
How is the funding fee calculated?
Funding amount = position notional × funding rate, where the notional is the mark price times the position size. A 10,000 USDT position at a 0.01% rate pays or receives 1 USDT per settlement.
How much did funding cost on Bitcoin over the past year?
On Binance's BTCUSDT perpetual, the 1,095 settlements from 1 November 2025 to 31 October 2026 added up to 3.47%. A 10,000 USDT long held at constant size paid 347.20 USDT. ETH added up to 2.51%, and SOL to −0.31%, meaning SOL longs were paid on balance.
Does leverage increase funding costs?
Funding is charged on the notional, not the margin. The amount in dollars is the same for a given position size, but relative to your margin it scales with leverage: 3.47% of the notional is 34.7% of the margin at 10×.
Is funding included in my trading fees?
No. It is a separate payment, settled at fixed times only while you hold a position. A trade opened and closed between two settlements pays no funding at all.