> ## Documentation Index
> Fetch the complete documentation index at: https://docs.arcus.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Funding

> How funding payments keep Arcus perps anchored to the underlying, how real-world-asset events are handled, and the off-hours funding and price-band regime

**Funding** is the mechanism that keeps a perp's price tethered to its underlying. Periodically, the side of the market trading at a premium pays the side trading at a discount, in proportion to the gap between the perp price and the [oracle price](/concepts/perpetuals/oracle-prices). When the perp trades above the oracle, longs pay shorts; when it trades below, shorts pay longs. There is no fee taken by the exchange on funding — it is a transfer between traders.

<Note>
  This page is conceptual. Live and historical funding values are available from [`GET /v1/markets/funding`](/api-reference/public/get-market-funding-rates) and the [`funding` WebSocket channel](/api-reference/channels#funding).
</Note>

## The basic model

The funding rate is driven by the **basis** — the gap between the perp's price and the oracle price. A persistent premium produces positive funding (longs pay), which incentivizes traders to close longs / open shorts and pulls the price back toward the oracle; a persistent discount does the reverse. This is the same convergence mechanism used across perp markets.

## Real-world assets

For perps on equities, commodity ETFs, and index ETFs, funding does more than close the basis: it also passes through the events that drive a real holder's return — **dividends, splits, and futures rolls** — so the perp tracks the **total return** of the underlying. Those mechanics are covered on [Real-world asset perps](/concepts/perpetuals/real-world-assets).

## Off-hours trading

A key advantage of perps is **24/7 price discovery**. But when an underlying market is closed, liquidity and the ability to hedge are limited, so Arcus applies guardrails for RWA perps during those windows:

* **Fixed off-hours funding.** Instead of a live, basis-driven rate, funding is locked to a base off-hours rate of **SOFR + 0.5%**, fixed at the close. This removes funding uncertainty for traders carrying positions overnight or over the weekend, beyond the price of the underlying itself.
* **Higher initial margin.** Opening or growing a position off-hours requires more collateral. See [Margin](/concepts/perpetuals/margin#off-hours-margin).
* **Price bands.** Trading and the mark price are constrained to a range around the last regular-hours price, widening only gradually if sustained pressure builds against a bound. This gives the market time to consolidate and helps prevent off-hours liquidation cascades.

Crypto perps have **no** off-hours regime — funding stays live and basis-driven around the clock.

<Note>
  Regular-trading-hours calendars differ by market, and the precise funding interval, clamps, and band parameters are internal settings. Read live funding from the API rather than recomputing it.
</Note>