# Funding (/docs/risex/trading/funding)

## What is Funding?

Funding is a mechanism that keeps perpetual futures prices aligned with the spot index price. Unlike traditional futures that expire, perpetuals use periodic funding payments between longs and shorts.

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## How Funding Works

* When the perp trades **above** spot: Longs pay shorts
* When the perp trades **below** spot: Shorts pay longs

This creates an arbitrage incentive that pulls the perp price toward the index.

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## Funding Rate

The funding rate is calculated based on the premium/discount of the perpetual price relative to the index price.

### Calculation

The funding rate formula considers:

* **Premium**: Difference between mark price and index price
* **Interest Rate**: Base rate component
* **Dampening**: To prevent extreme funding swings

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## Settlement Schedule

| Parameter                | Value              |
| ------------------------ | ------------------ |
| **Settlement Frequency** | Every 1 hour       |
| **Max Funding Rate**     | ±0.75% per 8 hours |

Funding is settled automatically, payments are added to or deducted from your margin balance at each settlement.

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## Funding Payment

Your funding payment is calculated as:

```
Funding Payment = Position Size × Mark Price × Funding Rate
```

* **Positive rate**: Longs pay, shorts receive
* **Negative rate**: Shorts pay, longs receive

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## Checking Funding

The current funding rate and next settlement time are displayed on the trading interface. Historical funding rates are available via the API.