Funding rates are the rates set by crypto assets trading platforms to maintain the balance between the contract price and the underlying asset price, usually applicable to perpetual futures. It is a funding exchange mechanism between long and short traders, and the trading platform does not charge this fee, which is used to adjust the cost or profit of the traders holding the contracts, so that the contract price remains close to the underlying asset price.

When the funding rate is 0.01%, it indicates the benchmark rate. When the funding rate is greater than 0.01%, it represents a general bullish sentiment in the market. When the funding rate is less than 0.005%, it represents a general bearish sentiment in the market.
When the contract price is higher than the spot (positive funding rate), longs need to pay fees to shorts to curb excessive optimism;
When the contract price is below the spot (negative funding rate), the short position must pay fees to the long position, alleviating excessive pessimism.