Funding is a payment between traders

What problem it solves

A dated future converges because it expires. A perpetual has no expiry, so something else has to pull it toward the underlying. That something is funding. Traders who are on the expensive side of the contract pay traders on the cheap side. The payment makes the expensive side less attractive, which is how the price is pulled back toward the index.

Kraken states this directly for the linear multi-collateral perpetuals: if the average premium over the hour is positive, longs pay shorts; if it is negative, shorts pay longs. The payment is between counterparties. Kraken's fee schedule says the funding rate is not a fee charged by the exchange.

Kraken's hourly rule

Figures in this section are Kraken's, from the documents linked below. They are not PERP KING settings, and Kraken can change them. Clients in the EEA should use the specification Kraken links for that region.

• The next hour's rate is computed from the current hour. Kraken records the premium of the perpetual against its real-time index, using an impact mid, and averages the middle of those observations.
• That average is scaled by a multiplier of 8. Other things equal, the average premium would be realised over eight hours rather than all at once.
• The hourly rate is then limited to a range of −0.50% to +0.50%.
• While you hold the position, funding accrues continuously as unrealised profit or loss, at the rate set for that hour.
• It is booked at the end of the hour, or earlier if your net position changes.
• Settlement of profit and loss is in USD. A profit can be paid in another collateral currency if you selected one. Losses are realised in USD. If USD is short, Kraken can convert other collateral, and conversion fees can apply.

Kraken's specification includes worked numerical examples. Use those examples on Kraken's page rather than a screenshot of an old rate. The rate on a contract right now is whatever Kraken shows for that contract. It changes every hour, and the Coin-M rate for the same asset can differ. An educational multiplication of a notional by a rate you type is on funding cost. It does not fetch Kraken's hourly rate, and it does not reproduce the continuous accrual above.

Clients in the EEA should follow the separate specification Kraken links from that page. Do not assume the hourly bound above applies to every Kraken entity.

Why it matters to a position

Funding is a holding cost or a holding credit. A position that is right on price can still lose money if it pays funding for long enough, and a position that is wrong can lose faster when funding is against it. The cash is part of the account equity Kraken uses when it judges margin, so funding can move you toward or away from liquidation. That link is on liquidation.

The sign is not a signal to copy. A positive rate means longs are paying. It does not, by itself, mean the price will fall. PERP KING does not publish a funding threshold, and this page is not one.

Simulation omits it. LIVE does not.

Simulation uses a 0.05% modelled fee per side and 0.02% adverse slippage. It does not charge or credit funding. A simulated result can look better or worse than the same decision would have looked on the exchange for that reason alone.

LIVE does not model funding inside PERP KING. Kraken applies it on your account, on Kraken's clock, to positions that are actually open. The fill you see is not the whole cost of holding.

Questions

Sources

Figures in this section are Kraken's, from the documents linked below. They are not PERP KING settings, and Kraken can change them. Clients in the EEA should use the specification Kraken links for that region.

• Linear Multi-Collateral Derivatives Contract Specifications — Kraken, last updated 8 September 2026. A separate specification is linked from that page for EEA clients.
• Fees for Derivatives trading — Kraken
• What are Derivatives? (FAQ) — Kraken