Check the contract rule first
Consider a hypothetical market. Venues may use different intervals, caps, indices, and premium formulas. Normalise time and annualisation before comparison, or apparently similar rates will describe different mechanics.
Pair funding with open interest
Rising funding and open interest can signal leverage building on one side. If open interest is falling, the same funding move may come from exits or a temporary imbalance.
Add spot and term basis
Perpetuals support direction, hedge, and relative-value trades. Spot activity, exchange flows, and term basis help identify the source of demand without providing a complete answer.
- Whether spot moves with the derivative.
- Whether term basis expands.
- Where open interest is concentrated.
- Whether liquidations reflect one-sided crowding.
Execution cost is the boundary
High funding can attract relative-value trades, but borrow, margin, fees, counterparty exposure, and exit depth determine the attainable return. A displayed rate is not a realised yield.