What is Bybit funding rate?

1. What is Funding Rate? Funding rates are periodic payments made to either long or short traders, calculated based on the difference between the perpetual contract prices and spot prices . When the market is bullish, the funding rate is positive and tends to rise over time.

Negative funding rates indicate that short position traders are dominant and are willing to pay long traders . Negative funding rates imply that many traders are bearish.

Funding Rate Calculation Bybit calculates the Premium Index (P) and Interest Rate (I) every minute and then performs an N*-Hour Time-Weighted-Average-Price (TWAP) over the series of minute rates. The Funding Rate is next calculated with the N*-Hour Interest Rate Component and the N*-Hour Premium / Discount Component.

Funding fees are periodic payments to traders . Funding fees are paid peer-to-peer. Therefore, Binance takes no fees from funding rates as they happen directly between users. Depending on their positions, traders will either pay or receive funding. Read more about Funding Fee.