🎈Don't understand funding rates? (Essential Info for Newbies)

It means that every 8 hours, those who short have to pay 8% of their position's value to those who go long. Under normal circumstances, the funding fee is positive, meaning those who go long pay the funding fee, while those who short receive it. For example, if you open a position of 100 USDT, you pay a funding fee of 6 USDT per hour. Everyone thought they could just go short and win, but the price surged instead. The funding fee for shorts is settled every hour, and if it’s 9%, you could lose everything in just a few minutes of shorting. You must have a funding rate; without it, how can the contract price be linked to the spot price? The contract price is linked to the spot price because of the funding rate.