Carry: funding, basis and borrow

Carry is what a position earns or costs just by being held. The classic carry holds spot and shorts the same size of perp: price exposure nets to zero, and you collect funding when longs pay shorts.

Say you hold 1 BTC spot at 100,000 USDC and short 1 BTC perp. In a quiet market you collect 0.00125 per cent an hour on 100,000 USDC: 1.25 USDC an hour, 30 a day, 10,950 a year simple. A taker round trip through both legs costs 0.23 per cent, 230 USDC, so the first 184 hours only pay the fees.

It pays only if annualised funding plus idle-collateral yield beats fees and borrow cost. The mechanisms live on funding, borrowing and lending and portfolio margin.

Funding is the income, paid hourly

Funding is paid hourly, peer to peer with no fee, at one eighth of an 8-hour rate; when positive, longs pay shorts.

F                        = P + clamp(I - P, -0.0005, 0.0005)
P                        = average of the premium index, sampled every 5 s over the hour
premium                  = impact_price_difference / oracle_price
impact_price_difference  = max(impact_bid - oracle, 0) - max(oracle - impact_ask, 0)
I                        = 0.01% per 8 hours (0.00125% per hour)
payment                  = position_size * oracle_price * funding_rate

• The clamp sets the quiet-market rate: with the premium within 0.05 per cent of the interest component, funding equals it, 0.00125 per cent an hour, longs to shorts.
• Payment uses the oracle price, not the mark, so a perp away from its oracle is charged on oracle notional.
• Annualised, the interest component is 10.95 per cent simple, about 11.6 per cent compounded 1,095 times a year (the docs’ figure): say which. Per the docs, the 0.5 per cent hourly cap is much looser than on centralised venues.
• HIP-3 differs: a more responsive premium, 0.5 * (impact_bid + impact_ask) / oracle - 1, and the deployer sets the funding multiplier, the interest rate and the clamp per asset (default clamp 0.0003, not 0.0005), so one underlying can carry differently across dexes.

The basis is a separate risk; fees dominate short holds

The basis, perp minus spot, doesn’t drive funding. Funding is measured against the oracle: a stake-weighted median of each validator’s weighted median of spot prices from up to 8 venues, Hyperliquid among them. Hyperliquid spot is left out for assets whose main spot liquidity is elsewhere, such as BTC. Hyperliquid spot against a Hyperliquid perp adds the drift between the two books, a separate risk in the docs.

Spot volume counts double towards fee tiers.

Round trip through both legs, base tier	Cost of notional	Quiet-market funding to earn it back
taker: 0.070% spot, 0.045% perps	0.23%	184 hours, about 7.7 days
maker: 0.040% spot, 0.015% perps	0.11%	about 88 hours
taker, HIP-3 perp at a 100% deployer share: 0.070% spot, 0.090% perps	0.32%	256 hours, about 10.7 days

HIP-3 perps can cost more. The deployer’s share, 0 to 300 per cent of the protocol fee (0 to 100 per cent in growth mode), is added on top, so check it before you size the trade. At a 100 per cent share the perp fee doubles. The 256 hours assume quiet-market funding of 0.00125 per cent an hour, which the deployer’s interest rate and multiplier change. On 2026-11-03, 150 of 236 HIP-3 multiplier entries were 0.5, and 24 assets set an 8-hour interest rate of 0.0000456621, 5 per cent a year.

Don’t count lending yield on a HYPE or BTC spot leg. Per the docs, supplied HYPE and BTC act as collateral and earn no interest; only supplied USDC and USDT do. The live reserves on 2026-11-03 also held USDH (token 360), borrowed at 11.3 per cent utilisation and supplying at 0.51 per cent, though the docs name only USDC and USDT.

The borrow rate and the supply identity

Stablecoin borrowing follows a kinked curve, with u = total_borrowed / total_supplied:

borrow_apy = 0.05 + 4.75 * max(0, u - 0.8)
supply_apy = borrow_apy * u * 0.9

Interest accrues continuously, indexed hourly like funding. The 0.9 is the 10 per cent of borrow interest the protocol retains as a buffer for future liquidations; the identity is measured to 9 decimal places.

The rate is flat at 5 per cent below 80 per cent utilisation, then adds 4.75 points per point: 52.5 per cent at 90 per cent. USDC sits at that kink: on 2026-11-03 its utilisation read 77.2 per cent in the morning, 80.6 per cent in the afternoon (borrow 7.67 per cent) and 79.9 per cent at 19:28 UTC (borrow 5 per cent, supply 3.59 per cent). A borrow-funded carry is short a call on utilisation that nothing on the venue hedges today (options on the borrow rate).

Portfolio margin lets the spot leg back the perp

The two legs’ profit and loss offset, and idle USDC is supplied at the supply rate. The docs’ example, 1 BTC spot and short 1 BTC perp at 10x:

BTC price	What happens
100,000 USDC	interest paid only on the 10,000 of initial margin; funding earned on the full 100,000 notional
150,000	USDC borrowed automatically against the spot BTC, instead of liquidating the short
200,000	the trader must cut size to avoid a borrow and lend liquidation

The borrow capacity, token_balance * borrow_oracle_price * LTV, binds before the liquidation ratio of 0.95: watch that headroom, not only the liquidation price. Spot borrows then liquidate in two stages (portfolio margin):

Stage	Triggered when borrowing exceeds	HYPE	BTC
Partial	collateral_value * (LTV + (1 - LTV) / 2)	82.5%	75%
Full	collateral_value * (LTV + (1 - LTV) * 2 / 3)	about 88.3%	about 83.3%

Net carry for the whole position:

funding_apr = funding_hourly * 8760
net_annual  = notional * funding_apr
            + idle_quote_balance * supply_apy
            - borrowed * borrow_apy
            - notional * round_trip_fee_rate          (once per entry and exit)

The numbers

Quantity	Value	Source
Funding interval	every hour, one eighth of the 8-hour rate	docs
Interest component	0.01% per 8 hours, 0.00125% per hour	docs
Funding clamp	interest - average premium clamped to plus or minus 0.05% on the 8-hour rate (HIP-3: deployer-set, default 0.03%)	docs
Premium sampling	every 5 s, averaged over the hour	docs
Impact notional	20,000 USDC for BTC and ETH, 6,000 USDC for other assets	docs
Funding cap	0.5% per hour	docs
Payment notional	position size x oracle price	docs
Annualisation	hourly rate x 8,760, that is 24 x 365 (simple)	code
Base-tier taker fee	0.070% spot, 0.045% perps	docs
Base-tier maker fee	0.040% spot, 0.015% perps	docs
Borrow rate	0.05 + 4.75 * max(0, u - 0.8)	docs
Supply rate	borrow * u * 0.9, measured to 9 decimal places	spec 02
USDC rates, 2026-09-20	borrow 5.00%; supply 3.01% at 66.97% utilisation	spec 02
USDT0 supply rate, 2026-09-20	1.78% at 39.56% utilisation	spec 02
USDC rates, 2026-11-03	borrow 5.00%, supply 3.47% at 77.19% utilisation (morning); borrow 7.67% at 80.56% (afternoon); borrow 5.00%, supply 3.59% at 79.88% (19:28 UTC)	live
LTV	HYPE 0.65, BTC 0.5	docs
Partial liquidation threshold	LTV + (1 - LTV) / 2: HYPE 0.825, BTC 0.75	docs
Full liquidation threshold	LTV + (1 - LTV) * 2 / 3: HYPE 0.883, BTC 0.833	docs
Portfolio margin liquidation	ratio above 0.95; minimum borrow offset 20 USDC	docs
Portfolio margin eligibility	over 5M USD weighted volume or over 10k USD account value, and account value under 25M USD (the FAQ says under 5M USD); no open positions, orders or TWAPs when enabling	docs
USDC caps	1B global supply, 500M global borrow, 250M user supply, 50M user borrow	docs
USDT caps	50M global supply, 10M global borrow, 5M user supply, 1M user borrow	docs
HYPE caps	25M global supply, 1M user supply	docs
BTC caps	5,000 global supply, 200 user supply	docs
HIP-3 fees	protocol fee plus a deployer share of 0 to 300% (0 to 100% in growth mode); above 100% the protocol fee rises to match	docs
Action cap	portfolio margin and unified accounts: 50k user actions a day	docs

Before you put the trade on

• Annualise on one convention, normalising other venues by their funding interval. The predicted fundings endpoint reports each venue’s interval, and returns nothing where the coin is not listed, which is not zero funding.
• The quiet-market rate is neither a floor nor a promise. Outside the clamp band funding follows the premium: once the average premium falls more than 0.05 per cent below the interest rate, funding drops below 0.00125 per cent an hour and can turn negative, shorts paying longs.

Reading rates from code

• funding in an asset context is a per-hour fraction, with no next-funding-time field.
• predictedFundings returns fundingRate, nextFundingTime and fundingIntervalHours per venue, but only for the first perp dex: no HIP-3 market appears. On 2026-11-03 every HlPerp entry gave the start of the current hour, already past, as nextFundingTime. Compute the next hour boundary yourself.
• Precompile 0x812 borrowLendReserveState(uint64 token) returns borrowYearlyRateBps, supplyYearlyRateBps and utilizationBps in basis points, and totalSupplied, totalBorrowed in 1e8 units for USDC. Latest block only: sample and store rate history yourself.
• Never derive the rate from balance: it exceeded totalSupplied - totalBorrowed by about 46.57 USDC on 2026-09-20 and about 94.88 USDC on the morning of 2026-11-03 and 96.13 USDC that evening, growing with each read.
• Do the arithmetic in decimal strings, not floats.

Margin mode, caps and the two USDC tokens

• Unified mode, the docs’ recommendation for most users, keeps one balance per asset: it backs every cross position settled in that asset. Spot BTC is a BTC balance, so it can’t back a USDC-settled perp.
• Standard mode splits margin by dex: each perp dex, including each HIP-3 dex, has its own balance and cross margin, and spot does not margin perps.
• So spot-collateralised carry needs portfolio margin, the only mode that borrows USDC against the spot leg (account modes).
• Past a borrow cap, portfolio margin falls back: further margin must come in the settlement asset, as if it were off.
• Liquidation order is not deterministic: perps or spot borrows may go first, depending on oracle update order.
• HyperCore USDC and the USDC of the deepest measured HyperEVM lending market are different, unlinked contracts, so carry between the two is a swap with its own cost. USDT0 is one contract on both sides.
• Caps bound the size of a carry: 200 BTC of supply per user caps a BTC spot leg, and USDT borrowing stops at 1M per user and 10M in total, which matters if you fund in USDT0.
• Documented caps move: the HYPE global supply cap went from 10M to 25M and the BTC cap from 2,000 to 5,000 between the 2026-09-20 and 2026-11-03 docs. Read the live reserve before relying on headroom.

For the cost side of every carry, see Fees, tiers and rebates.