Glossary
Funding Rate
A periodic payment between long and short perpetual positions, set by how one-sided the market is.
The funding rate keeps a perpetual contract tracking spot. When the contract trades above spot, longs pay shorts; when it trades below, shorts pay longs. It is applied on a fixed schedule and changes continuously between payments.
The rate is a crowding indicator as much as a cost. A persistently positive rate means longs are the crowded side, and holding through that costs real money every interval.
Annualising the per-interval rate shows whether the carry is worth it. If the cost of holding a swap exceeds what you expect the position to earn, you are paying to maintain the view.
Related terms
Airdrop
Free tokens distributed to wallet addresses, usually to reward early users of a protocol.
AMM
Automated Market Maker — a protocol that prices assets with a formula instead of an order book.
APR vs APY
APR is the yearly rate without compounding; APY includes compounding and is always higher.
ATH
All-Time High — the highest price an asset has ever traded at.
Bear Market
A prolonged decline, conventionally 20% or more from recent highs.
Bull Market
A prolonged rise driven by new demand, easy credit and rising confidence.