Funding rate vs basis: how they differ and connect

Basis is a price gap: how far a derivative trades above or below the spot price of the same asset. The funding rate is a payment between the longs and shorts of a perpetual future, and it is calculated largely from that gap, so the two numbers are related but measure different things.

The short definitions are on the premium / basis and funding rate pages. This guide puts the two side by side, shows how the gap turns into a payment on a perpetual, and explains why the same gap means something very different on a dated future.

Two numbers, two units

The funding side follows Hyperliquid's documentation.¹

The word "basis" comes from dated futures, where it is the gap between the futures price and spot. On a perpetual the same gap is usually called the premium. Our pages use the premium as (mark − index) ÷ index, with the oracle price as the index on Hyperliquid and each venue's published index price on Binance and Bybit.

Basis on a dated future

A dated future has an expiry. On that date it settles against the spot index, so its price and the spot price have to meet. Binance's quarterly USDⓈ-margined contracts, for example, expire on the last Friday of their quarter.² Before expiry, the futures price can sit above spot (a positive basis) or below it (a negative basis), but the gap has a known end date.

That end date is what makes a dated basis easy to compare: divide the gap by the days left and scale it to a year.

The carry of a dated future is therefore fixed when the position is opened. Nothing is paid until expiry, and the basis shrinks towards zero as the date approaches.

Premium on a perpetual

A perpetual never expires, so there is no date on which its price must meet spot. Funding takes over that job: as long as the perpetual trades above the index, longs pay shorts, which makes holding the long more expensive and gives traders a reason to take the other side.¹

On Hyperliquid, the premium that goes into funding is not the mark price gap. It is measured with impact prices: the average fill price of a trade of a fixed size against the bids and against the asks, compared with the spot oracle, sampled every 5 seconds and averaged over the hour.¹ The mark price itself includes a 150-second moving average of the gap between Hyperliquid's mid price and the oracle.³ Both describe the same thing, how rich or cheap the perpetual trades, but they are two different measurements and can differ for a moment.

How a premium becomes a funding rate

Hyperliquid's formula is F = P + clamp(interest − P, −0.05%, +0.05%), an 8-hour rate paid hourly at one eighth, with a fixed interest part of 0.01% per 8 hours and a cap of 0.5% per hour.¹ Two things follow for the relationship with basis:

• Small premiums disappear. While the average premium stays close to the interest rate, the clamp returns exactly the interest rate. A perpetual can trade slightly above or below spot and still pay the baseline.
• Large premiums pass through. Once the premium leaves that band, funding moves with it, one for one, minus or plus the clamp.

The unit is where funding and basis part ways. A dated basis is spread over the time to expiry. A perpetual premium is charged every hour for as long as it lasts.

The example shows why a large perpetual premium is expensive to hold: the expensive side pays far more per day than it would for the same gap on a dated contract, which is exactly the pressure funding is designed to create.

Funding vs basis in cash and carry

Both numbers are used to earn a spread without a view on the price, and the difference between them is the difference between a fixed and a floating return:

• Dated carry: spot against a short dated future. The basis is known at entry and converges at expiry. The risk is in margin and fees, not in the size of the payment.
• Perpetual carry: spot against a short perpetual. The position collects funding interval by interval. Rates change every hour, can fall to the baseline, and can turn negative, in which case the short side pays.

How the perpetual version works in detail, with its costs, is covered in funding rates and funding arbitrage.

Reading both on our pages

The Premium view of the funding page lists, per coin and venue, the mark price, the index price, the premium and the annualised funding rate in one row. That makes the relationship visible: coins with a persistent positive premium usually pay positive funding, and coins with a negative premium negative funding.

Two limits apply:

• We collect perpetual futures, not dated ones. Dated futures (quarterly basis) are not collected, so the basis on our pages is always the perpetual premium.
• Index definitions differ by venue. Each venue builds its index from different spot exchanges with different weights, so the same coin can show slightly different premiums on two venues even if both trade at the same price.

Each coin's positioning tab adds open interest to funding, which shows whether a premium came with new positions being opened or with an existing crowd paying to stay in.