Is funding-rate farming profitable?
Historically, barely: a few percent in total over four and a half years after costs, and only with infrequent rebalancing. In the first half of 2026, no — it lost money at every cadence we tested.
Why costs and rebalance cadence decide everything
The edge is small per period, so the biggest lever is how often you rebalance — every rebalance pays fees and slippage on both legs. Same edge, same window (1 Jan 2022 – 24 Jun 2026, totals over the window):
| Gross funding accrual (before costs) | +19.3% | 4.0% CAGR — the edge in isolation, NOT achievable net |
| Net, daily rebalance | -19.1% | 8.7%/yr cost drag — over-trading turns the edge negative |
| Net, weekly rebalance (headline) | +2.8% | Sharpe 0.50 · max drawdown -5.3% · 2.1%/yr drag |
| Net, biweekly rebalance | +4.6% | Sharpe 0.83 · 1.1%/yr drag — less trading, more kept |
Related reading
The rest of the funding-rate explainers, in plain English.
What is a funding rate?
What it is, why it exists, who pays whom.
What is delta-neutral (in crypto)?
Why long spot, short perp cancels price — and what risk remains.
What is a basis trade (spot–futures basis)?
Cash-and-carry vs perpetual funding: same shape, different clock.
What is funding-rate capture (delta-neutral funding yield)?
How a hedge collects funding — and the net numbers.