A funding rate is incomplete without a contract identity and a clock. Two rates with the same displayed percentage can imply different cash flows if their units, accrual periods or settlement arrangements differ.
Read the product specification first
Kraken describes perpetual funding as payments between long and short holders that help align the contract price with its reference market. In its Linear Multi-M specification, positive funding is paid by longs to shorts and negative funding reverses the direction. That document describes hourly mechanics.
A separate Kraken Derivatives US page describes funding aggregated into a daily cash adjustment at 3:00 pm Central Time. These are product-specific descriptions, rather than interchangeable statements about every perpetual contract. A research comparison should name the applicable product and jurisdiction before comparing rates.
Illustrative scenario: retain every payment period
For arithmetic only, assume a hypothetical long position has a constant $100,000 notional, three one-hour funding periods and the rates below. This is an invented scenario, not a current Kraken quote or a prediction. Positive amounts in the payment column are costs to the long position.
| Assumed period | Rate for that hour | Long funding payment |
|---|---|---|
| 09:00–10:00 UTC | +0.01% | Pays $10 |
| 10:00–11:00 UTC | +0.03% | Pays $30 |
| 11:00–12:00 UTC | −0.02% | Receives $20 |
The net funding cost is $20 across these three periods. That number excludes movement in the contract price, trading fees, collateral costs and any change in notional. A single first-period quote would have missed both the larger second payment and the reversal in the third period. Annualizing that first quote would add an unsupported assumption about how long it persists.
Make the comparison reproducible
A useful funding worksheet records the contract identifier, legal entity or jurisdiction, reference price, payer convention, rate unit, position quantity, accrual window and settlement event. The same row should identify whether an amount is an estimate, an accrued amount or a settled ledger entry. Reconciliation then follows actual provider records rather than a percentage copied from a screen.
The example holds notional constant solely to isolate the rate arithmetic. Actual funding calculations can use contract-specific reference values and position-change rules. Availability, collateral and liquidation terms also differ. The analytical conclusion is straightforward: funding belongs in a cash-flow schedule with its assumptions attached, rather than being presented as a stable yield or a complete cost of holding a position.