What is Funding rate?

The periodic payment between long and short perpetual traders that keeps the contract near spot.

When perpetuals trade above spot, longs pay shorts; below spot, shorts pay longs. The rate is set by the exchange, often every eight hours.

Persistently positive funding means leverage is crowded on the long side — a warning about crowded positioning rather than a forecast in itself.

Perpetual futuresTrading
A derivative that tracks an asset with no expiry, held open by periodic funding payments.
LeverageTrading
Using borrowed exposure so a small price move produces a large gain or loss.
Open interestTrading
The total value of futures positions currently open, a measure of how much leverage is in play.

See it on a coin page