Funding Rate Trading
What Are Funding-Rate Trades?
In crypto perpetual futures markets, the funding rate is a periodic payment exchanged between traders who hold long and short positions. It keeps perpetual contract prices aligned with the spot market.
When perpetual futures trade above the spot price, longs pay shorts (positive funding). When they trade below, shorts pay longs (negative funding).
A Funding-Rate Trade takes advantage of this mechanism in a delta-neutral way. Traders open offsetting positions on two different platforms – for example, long on one exchange and short on another – to capture the difference in funding rates rather than speculating on price direction.
This approach is common on centralized exchanges such as Binance, Bybit, or BingX, where funding payments occur every few hours.
How It Works on LeverageX
LeverageX enables the same strategy in a decentralized, non-custodial environment. Traders can open long or short positions on LeverageX while holding an opposite position on a centralized exchange. The goal is to capture the funding spread between both markets.
A dedicated in-app category called Funding Hunter provides access to already more than 20 tokens suitable for this strategy (more tokens to be added frequently). Many of these tokens are not available for delta-neutral setups elsewhere, giving traders a unique edge and broader exposure.
Platform link: https://app.leveragex.trade.
Understanding the Funding Rate
Funding rates can be monitored in real time using public tools such as: https://www.coinglass.com/FundingRate
When the rate is negative (for example, -0.10%), long traders receive funding payments. That means opening a long position on the CEX (for example, Bybit) and a short position on LeverageX can earn the positive spread.
If the funding rate is positive, short traders receive payments. In that case, opening a short on the CEX and a long on LeverageX might capture the difference.
Each exchange pays out funding at different intervals – sometimes every hour, two hours, four hours, or eight hours, depending on the platform. Always check the futures or perps section of the respective CEX. Example view: https://www.bybit.com/trade/usdt/FUSDT.
Collateral and Token Utility
All Funding-Rate Trades on LeverageX require JAV or JAVLIS as collateral.
Buy JAV here: https://docs.javsphere.com/fundamentals/buy-and-add-jav
Buy JAVLIS here: https://docs.javsphere.com/javlis/buy-javlis
This setup standardizes collateral management and increases token utility while ensuring transparent on-chain exposure even when hedging against centralized exchanges.
Unlike USDC or other stablecoins, JAV and JAVLIS are used because LeverageX assumes the platform risk when enabling these trades. This token-backed structure gives both tokens real utility and connects trading activity directly to ecosystem value.
Why LeverageX for Funding-Rate Trades
Funding-Rate strategies are only profitable when fees stay low. Many centralized exchanges increase funding or trading fees during high-volatility events to limit arbitrage and protect against market imbalance.
LeverageX takes the opposite approach – fees are intentionally kept very low so that traders can keep Funding-Rate Trades open longer and collect multiple rounds of funding payments. This makes the strategy far more sustainable and profitable over time.
Step-by-Step: Executing a Funding-Rate Trade
Acquire $JAV or $JAVLIS and use it as collateral on LeverageX.
Navigate to the https://app.leveragex.trade/ category.
Look for an attractive funding rate tradable token on https://www.coinglass.com/FundingRate
Select an eligible token such as $F, $AVAIL, $AVNT, $BIO, or $ZORA.
Open a long or short position on LeverageX.
On a centralized exchange like Bybit, Binance, or BingX, open the opposite position to remain delta-neutral.
Track the funding rate using Coinglass or directly on the CEX’s futures page.
Collect the funding payments generated on the CEX side while keeping your delta-neutral setup active.
This lets traders earn from funding differences without taking price risk on the underlying asset.
Why This Matters
Funding-Rate strategies are becoming a key part of advanced trading. They add liquidity, help balance markets, and allow participants to profit without depending on volatility.
LeverageX brings this concept to decentralized markets, offering:
Access to assets not available for delta-neutral setups elsewhere
On-chain transparency and non-custodial execution
Increased activity and token utility through $JAV and $JAVLIS collateral use
As traders engage with Funding-Rate setups, overall trading volume and token demand increase, reinforcing ecosystem sustainability.
Getting Started
Explore the Funding Hunter category at LeverageX.trade and learn How to Get and Use $JAV / $JAVLIS
Funding-Rate Trades combine efficiency, innovation, and DeFi transparency – bringing one of the most popular centralized trading strategies into the decentralized world.
(For informational purposes only. Trading involves risk. Not financial advice.)
Last updated
Was this helpful?