What is the funding rate in OPUSDT perpetual futures contracts?

What is the funding rate in OPUSDT perpetual futures contracts?

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The funding rate in OPUSDT perpetual futures contracts is a mechanism used to ensure that the price of the futures contract remains close to the spot price of OP. It is a small fee exchanged between traders based on their open positions. If the funding rate is positive, traders with long positions (those who are betting on the price increasing) pay a fee to traders with short positions. Conversely, if the rate is negative, short traders pay long traders. The funding rate is typically calculated every eight hours and is based on the difference between the perpetual contract price and the spot price. Understanding the funding rate is essential for managing costs and making informed decisions in futures trading. To learn more about how the funding rate works, visit OPUSDT.