Swaps use a daily funding payment that is benchmarked against the real cost of financing the underlying asset across traditional markets.
Equity indices: The overnight interest rate of the index's currency (e.g., SOFR for USD indices), adjusted by a spread.
FX: The overnight interest-rate differential between the two currencies, adjusted by a spread.
Precious metals: The implied cost of borrowing or lending the precious metal against USD overnight.
Other: The daily carry of the underlying futures curve.
Swap funding is anchored to real market rates, stemming from actual financing terms received from TradFi liquidity partners rather than the variable supply-and-demand funding used for perpetual futures.
This structure produces more stable and predictable funding costs compared with perpetual futures, where funding rates fluctuate with market positioning.
The funding rates on swaps are generally asymmetric, typically with longs paying funding and shorts receiving funding. However this is based on market conditions and can vary. More information can be found on Swaps Funding.
Weekend Adjustment
When markets are closed over the weekend or for a holiday, the preceding funding payment may be charged for all of the upcoming closed days at once. For example, if a market is closed on Saturday and Sunday, the funding charged on Friday may be tripled. Some markets may charge this tripled funding rate on Wednesdays (instead of Fridays).
Dividends & Cash Adjustments
Certain swap markets may also support dividends and other cash adjustments. These are applied as part of the funding process so that the swap instrument continues to track the total return of the asset.
Generally speaking, shorts pay the dividend, and longs receive the dividend payment.