What is the funding rate and how funding arbitrage works
A straightforward, jargon-free guide to the payment almost nobody explains well: what it is, who pays whom, why it differs from exchange to exchange and how you can trade on it.
Everyone talks about it, few explain it
Anyone entering the world of perpetual contracts soon runs into words like funding, long, short and arbitrage. The videos show screens full of numbers, and in the end you still don't know where the money really comes from.
Understanding funding is the first step to deciding whether this strategy makes sense for you, and to recognizing when someone is promising more than it delivers.
- "Who pays the funding and who receives it?"
- "Why does each exchange have a different funding rate?"
- "Can you make money without betting on the price?"
- "What are the real risks?"
What the funding rate is, in plain language
A perpetual contract is a crypto contract with no expiration date. To keep its price from drifting away from the spot price of the coin, the exchange uses funding: a payment made every so often between those who are long and those who are short.
When funding is positive, longs pay shorts. When it's negative, it's the other way around. The exchange doesn't keep this money: it passes from one side to the other. The interval varies, and on many coins the payment happens every 1, 4 or 8 hours.
Each exchange calculates its own funding based on its own demand and its own price. That's why the same coin can have a different funding rate on two exchanges at the same moment. That difference is what arbitrage takes advantage of.
How funding arbitrage takes advantage of it
The idea is to open two opposite positions in the same coin, for the same amount, on two exchanges: one long and one short. Because the positions offset each other, the gain or loss caused by price movement cancels out. What remains is the sum of the funding payments on both legs, minus fees.
Illustrative example
With $1,000 on each leg and a net funding of 0.05% per payment, each payment earns about $0.50 before fees. These are example numbers, and they change all the time.
What eats into the gain
Entry and exit fees, the price difference between exchanges when opening and closing, and periods when funding falls or flips.
Why automate
The good windows are short and both orders need to go out together. A bot monitors the 14 exchanges, picks the coin and executes both legs at the same time.
The same product, whichever pain point brought you here
Wherever you start, you end up in the same place: a dashboard with arbitrage bots that trade both legs at the same time, with protection on every trade.
Funding Day Trade
Enters close to the funding payment on both exchanges at the same time, collects it and exits.
Funding Scalp
A window of a few minutes around the payment, with a minimum profit calculated on the margin.
Futures Price Arbitrage
The price difference of the same contract between two exchanges.
Liquidity Pool
Trades run jointly, with the result split according to your share.
Keys without withdrawal
No project needs withdrawal permission. Your money stays on your exchange.
3 stops per trade
Exit zone, exchange-side insurance orders and isolated liquidation, so you get out before the worst.
Frequently asked questions
Is the funding rate the same as interest?
Not exactly. It looks like interest, but it's a payment between traders that keeps the contract price close to the price of the coin. It can be positive or negative.
Who pays the funding when it's positive?
Longs pay shorts. When it's negative, shorts pay longs.
Why does funding differ from exchange to exchange?
Because each exchange has its own demand, its own reference price and its own formula. Those differences create the arbitrage opportunities.
Do I need a lot of money to start?
You can start with small amounts, but exchanges have a minimum size per contract and fees weigh more on very small amounts. The guided setup shows the minimum for each trade.
Does Multi Arbitrage guarantee profit?
No. No result is guaranteed. Trading crypto derivatives involves risk of loss, including the full amount in a trade. The figures shown on these pages are examples.
Do I need an exchange account?
Yes. You trade in your own account and add an API key without withdrawal permission to the system. Automatic trading works on the exchanges already validated for customers: today Binance, Gate, Bitget, BingX, XT and Phemex. The others will be added gradually.
Start with $30 in credits
Connect your exchanges with keys that can't withdraw and let the bot work. You pay 30% of the profit, and only when there is a profit.
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This content is for information only and is not investment advice. Trading crypto derivatives involves a high risk, including the total loss of your capital. Past results do not guarantee future results, and the figures mentioned are examples. Before trading, check whether trading crypto derivatives is allowed in your country and what your tax obligations are. Assess whether the product suits your profile before investing.