Fees are usually something you pay. On carrotfunding, one of them can flow the other way. Let's deep dive into the Hidden Edge.
A few days ago, one of our traders went long $BTC at $71,800. The trade ran for four days, BTC pushed to $73,740, and they closed up $889.74 in PnL. Just one trade. Until you look at the fees column.
+$84.94 in fees. Earned. Not paid.
That's not a glitch in the dashboard. It's the funding rate doing what it was designed to do.
Here's how it actually works.
What a funding rate is, in plain English
Perpetual futures don't expire. That's the whole point. You can hold a leveraged position for days, weeks, or months without rolling contracts. But this creates a problem: there's no settlement date to anchor the perp price to spot.
So perpetual exchanges use funding rates. They're periodic payments that move between long and short traders to keep the perp price tethered to the underlying spot market.
The mechanic is simple: when one side of the market is heavily skewed, the dominant side pays the smaller side a fee for taking the opposite trade. If everyone's long, longs pay shorts. If everyone's short, shorts pay longs.
It's the market's way of bribing someone, anyone, to balance the book.
Why this matters for funded traders
Fees are usually a one-way street. Spread, commission, swap, holding fees. They drain your account whether your trade wins or loses.
Carrotfunding is different because we don't run on a broker. We run on gTrade by @GainsNetwork_io. An on-chain perpetual futures protocol. That means every funding rate, every skew adjustment, every payment between longs and shorts happens at the protocol level, transparently, and the trader on the right side keeps the funding fee.
So when our trader went long BTC and the rest of the market was piled into shorts, they weren't just betting on price. They were getting paid by every short on the platform to hold that long position open.
For four days, that paid out $84.94.
How gTrade calculates funding (the technical part)
gTrade migrated to its v10 funding fee model in August 2025, replacing the older borrowing-fee-only system on major pairs. The current model works like this:
1. Skew is the input.
The protocol measures the imbalance between long and short open interest on each pair. The bigger the skew, the bigger the funding rate.
2. The velocity model controls the speed.
Rather than spiking funding rates the moment a market gets imbalanced, v10 uses a velocity-based model. Fees adjust progressively based on market skew: the greater the imbalance, the faster the change. Instead of sudden spikes, funding rates evolve over time, creating a more stable trading experience.
This matters for funded traders. It means funding changes gradually instead of arriving as a flash payment that disappears in a single block.
3. The dominant side pays the minority side.
If longs dominate open interest, longs pay funding. Shorts receive it and vice versa.
Why this is a real edge, not a gimmick
Let's be clear about what just happened in that BTC trade.
The trader didn't just get lucky. They were:
- On the right side directionally (long into a $1,940 move)
- On the minority side of the order book (most of the market was short)
- Holding for the right duration (four days, long enough for funding to compound meaningfully)
That last point is easy to miss. Funding is a time-based payment. The longer you sit on the receiving side of an imbalance, the more of it adds up. The longer you sit on the paying side, the more it costs you. On a $30k position, $84.94 over four days is what this one trade collected. It is a single case, not a rate to plan around.
For traders who already think in skew, basis, and positioning, funding is part of the trade: a credit on one side, a cost on the other.
On carrotfunding, your account is automatically debited or credited based on your position direction, and these adjustments factor into your equity limits.
How to actually use this
Funding on a Carrot challenge or funded account: two things to know.
Read the skew before you enter. gTrade's interface shows long/short OI for every pair. If the book is heavily skewed and you have a directional thesis that aligns with the minority side, you're stacking edges.
Hold long enough for it to matter. Funding compounds over time. Scalping in and out kills the funding edge. This is a swing trader's tool more than a scalper's.
The bigger point
The reason carrotfunding can offer this isn't marketing. It's architecture.
When your prop firm is based on a real on-chain perpetual exchange, every protocol-level mechanic like funding rates passes through to the trader.
You get the full DeFi-native trading environment, with funded capital sitting on top.
That's the difference.
