December 19, 2025 - Scaling Factor for Funding Rate Formula Update
The default funding rate for crypto perps has remained unchanged at 0.01% / 8 hours since Bitmex first introduced the mechanism in 2016. Borrow rates for traditional asset classes (e.g., equities, commodities) are typically closer to SOFR + 1-2%. We reduced the funding rate across all XYZ markets by applying a scaling factor of 0.5 to Hyperliquid’s funding rate formula. This lowers baseline funding to ~5.5% annualized and results in less aggressive funding during weekend price discovery as well.
The specific formula is Funding Rate XYZ (F) = 0.5 [Average Premium Index (P) + clamp (interest rate - Premium Index (P), -0.0005, 0.0005)].
