What the hourly rate means
Hyperliquid expresses funding as an 8-hour rate but pays one eighth each hour. The mechanism keeps perpetual prices anchored to the underlying index by transferring value between long and short positions; it is not a fee collected by the exchange.
Positive funding means the long side pays. Negative funding reverses the direction. The live Market Pulse shows the current hourly percentage and a simple annualized estimate, but annualization assumes an unchanged rate and is not a forecast.
Funding payment formula
The official formula is position size in base units multiplied by oracle price and the funding rate. That is equivalent to position notional multiplied by the hourly rate. A $100,000 long at +0.001% hourly funding pays about $1 per hour; at −0.001%, the same long receives about $1 per hour.
payment = position_size × oracle_price × hourly_funding_rate
Why funding changes
Funding responds to the relationship between the perpetual market and robust external price indices. Crowded directional positioning can produce persistent carry, while rapid dislocations can change the rate between observations.
The published methodology includes a fixed interest component and a premium component, with a protocol cap. Do not extrapolate one hour across a week without a sensitivity range; carry often changes fastest when volatility and leverage rise.
- Check the sign before entering.
- Model low, base and high-rate cases for long holds.
- Use oracle notional for the official payment logic.
- Recheck after large price moves or positioning changes.
Use funding with OI and liquidity
Funding alone does not identify a trade. Pair it with open interest, 24-hour notional volume, the mark-oracle relationship and execution depth. Rising OI with expensive positive funding can indicate crowded longs, but it can also accompany a strong trend.
Treat the rate as a carrying-cost input and a positioning clue, not a deterministic signal. The Market Pulse keeps these fields adjacent so you can inspect the combination.