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Earn Your First $100 with Funding Rate Arbitrage: Complete Beginner's Guide

FundingView TeamDecember 15, 20249 min read
Earn Your First $100 with Funding Rate Arbitrage: Complete Beginner's Guide

Never traded perpetuals before? No problem. This guide will take you from zero to your first $100 in funding rate profits.

We'll cover everything: what you need, how to set up, and exactly how to execute your first trade. By the end, you'll understand how to earn passive income from crypto without taking any directional risk.

Let's get started with FundingView (Funding View) and Paradex.

What You'll Learn

  1. What is funding rate arbitrage (explained simply)
  2. What you need to get started
  3. How to set up your wallets and accounts
  4. How to find opportunities with FundingView
  5. How to execute your first trade step-by-step
  6. How to monitor and collect your profits

Time required: About 30 minutes to set up, then passive income

Starting capital: $500-$1,000 recommended (you can start with less)

Part 1: Understanding the Basics

What is Funding Rate Arbitrage?

Imagine you can bet on Bitcoin going up on one website, and bet on Bitcoin going down on another website, at the same time.

If Bitcoin goes up → you win on website A, lose on website B = break even If Bitcoin goes down → you lose on website A, win on website B = break even

So why do this? Because these websites pay you to hold certain positions. This payment is called the funding rate.

The trick: Different websites pay different rates. You can:

  • Get PAID on website A
  • Pay LESS on website B
  • Keep the difference as profit

That's funding rate arbitrage. Zero risk on price movement, pure profit from the spread.

How Much Can You Earn?

With $1,000 total capital, realistic earnings are:

SpreadDaily ProfitMonthly ProfitAPR
0.01%/hour$2.40$72~87%
0.02%/hour$4.80$144~175%
0.03%/hour$7.20$216~262%

These spreads exist regularly. FundingView helps you find them.

See current opportunities →

Part 2: What You Need

1. A Crypto Wallet

You need a wallet to connect to decentralized exchanges. We recommend Rabby Wallet - it's the easiest and most secure option:

  • Rabby Wallet - Our top recommendation, super easy to use
  • Works with all DeFi apps
  • Shows you transaction previews before signing
  • Multi-chain support built-in

Download Rabby Wallet from rabby.io - it takes 2 minutes to set up.

2. Some Crypto (USDC or ETH)

You'll need funds to trade. We recommend:

  • USDC (stablecoin, easiest to use)
  • Start with $500-$1,000 to see meaningful profits
  • You can start smaller, but fees will eat into profits

3. Accounts on Two Exchanges

For this guide, we'll use:

Both are decentralized = your funds stay in your control.

4. FundingView (Free)

FundingView shows you funding rates across all exchanges. No signup needed, completely free.

Part 3: Setting Up (Step-by-Step)

Step 1: Install Rabby Wallet

  1. Go to rabby.io
  2. Click "Download" and install the browser extension
  3. Create a new wallet
  4. IMPORTANT: Write down your seed phrase and store it safely
  5. Set a strong password

Rabby is super intuitive - you'll be ready in 2 minutes.

Step 2: Get USDC

If you already have crypto, skip this. Otherwise, use OKX to buy USDC with your card or bank account:

  1. Sign up on OKX (use our link for bonuses)
  2. Complete KYC verification
  3. Buy USDC with your card or bank transfer
  4. Withdraw USDC to your Rabby wallet address on Arbitrum network

Pro tip: Withdraw directly on Arbitrum to save on fees. OKX supports this.

Step 3: Set Up Paradex

  1. Go to Paradex
  2. Click "Connect Wallet"
  3. Select Rabby (or MetaMask) and approve the connection
  4. Sign the message to create your Paradex account
  5. Click "Deposit" and bridge your USDC

Note: Paradex uses StarkWare. The first deposit takes ~15 minutes to bridge.

Deposit around half your capital here (e.g., $500 if you have $1,000).

Step 4: Set Up Hyperliquid

  1. Go to Hyperliquid
  2. Click "Connect" and select your wallet
  3. Sign the message
  4. Click "Deposit" and transfer USDC

Note: Hyperliquid uses Arbitrum. Deposits are fast (~2 minutes).

Deposit the other half of your capital here.

Step 5: Verify Everything is Ready

You should now have:

  • ✅ Rabby wallet set up
  • ✅ ~$500 USDC on Paradex
  • ✅ ~$500 USDC on Hyperliquid
  • ✅ Small amount of ETH for gas (Rabby handles this automatically)

Congratulations! You're ready to make your first trade.

Part 4: Finding Your First Opportunity

Using FundingView

  1. Open FundingView Dashboard
  2. You'll see a table with all trading pairs
  3. Look at the funding rates column for each exchange
  4. Find a pair where rates are significantly different

What to Look For

Good opportunity example:

  • ETH on Paradex: +0.035% per hour
  • ETH on Hyperliquid: +0.005% per hour
  • Spread: 0.03% per hour = great!

Not worth it:

  • BTC on Paradex: +0.012% per hour
  • BTC on Hyperliquid: +0.010% per hour
  • Spread: 0.002% per hour = too small

Minimum Spread to Target

For beginners, look for spreads of at least 0.01% per hour (87% APR).

Anything above 0.02% is excellent.

Check the Strategy Page for best opportunities →

Part 5: Executing Your First Trade

Let's say you found this opportunity:

  • ETH on Paradex: +0.03% hourly (positive = shorts get paid)
  • ETH on Hyperliquid: +0.01% hourly (positive = longs pay)

Here's exactly what to do:

On Paradex (SHORT position)

  1. Go to Paradex
  2. Select ETH-USD from the markets
  3. Click on the trading panel
  4. Select SHORT
  5. Set leverage to 2x (safer for beginners)
  6. Enter your amount: $500
  7. Use a Market Order for instant execution
  8. Click Place Order
  9. Confirm in your wallet

Your position: Short $500 of ETH at 2x leverage

On Hyperliquid (LONG position)

  1. Go to Hyperliquid
  2. Select ETH from the markets
  3. Select LONG
  4. Set leverage to 2x (match Paradex)
  5. Enter amount: $500 (match Paradex)
  6. Use Market Order
  7. Click Place Order
  8. Confirm

Your position: Long $500 of ETH at 2x leverage

What You Now Have

  • Short $500 ETH on Paradex → Receiving ~0.03%/hour
  • Long $500 ETH on Hyperliquid → Paying ~0.01%/hour
  • Net profit: ~0.02%/hour on $500 = $0.10/hour

That's about $2.40/day or $72/month on just $1,000 capital!

Part 6: Monitoring Your Trade

Check Your Positions Daily

On each exchange, go to your Positions tab to see:

  • Current PnL (profit/loss from price movement)
  • Funding received/paid
  • Margin health

Remember: Your price PnL will fluctuate, but it cancels out between exchanges. Focus on the funding payments.

Use FundingView to Monitor Rates

Check FundingView daily to make sure the spread is still profitable.

If the spread drops below 0.005%, consider closing your positions.

When to Close

Close your positions when:

  1. The funding spread disappears or reverses
  2. You've reached your profit target
  3. One position is getting close to liquidation (shouldn't happen with 2x leverage)

How to Close

  1. On Paradex: Click your position → "Close Position"
  2. On Hyperliquid: Click your position → "Close"
  3. Withdraw your funds back to your wallet

Part 7: Your First $100

The Math

To earn your first $100:

SpreadDaily ProfitDays to $100
0.01%/hour$2.4042 days
0.02%/hour$4.8021 days
0.03%/hour$7.2014 days

With a good spread (0.02-0.03%), you can hit $100 in 2-3 weeks.

Scaling Up

Once you're comfortable:

  • Add more capital
  • Run multiple trades on different pairs
  • Use more exchanges (Extended, Lighter)

With $5,000 capital and good spreads, you could earn $500+/month.

Common Mistakes to Avoid

1. Using Too Much Leverage

  • Stick to 2-3x max
  • Higher leverage = higher liquidation risk

2. Unequal Position Sizes

  • Always match your position sizes exactly
  • $500 short = $500 long

3. Ignoring Fees

4. Not Monitoring

  • Check daily, rates can change
  • Set up alerts if possible

5. FOMO on Small Spreads

  • Don't trade spreads under 0.01%
  • Wait for good opportunities

Bonus: Extra Profits

Exchange Points Programs

Both Paradex and Hyperliquid have points programs:

  • You earn points just by trading
  • Points may convert to tokens (airdrops)
  • This is free extra profit on top of funding

Referral Discounts

Use our links to get fee discounts:

See all exchange offers and discounts →

Quick Reference Checklist

Before your first trade:

  • MetaMask installed
  • USDC deposited on Paradex
  • USDC deposited on Hyperliquid
  • Found a spread > 0.01% on FundingView

Opening positions:

  • SHORT on the exchange with higher positive rate
  • LONG on the exchange with lower positive rate
  • Same position size on both
  • Same leverage (2x recommended)

Daily monitoring:

  • Check positions on both exchanges
  • Check FundingView for rate changes
  • Ensure margin is healthy

Summary

Funding rate arbitrage is one of the safest ways to earn yield in crypto:

  1. No directional risk - you're hedged
  2. Passive income - set it and collect
  3. High APR - 50-200%+ is common
  4. Fully decentralized - your keys, your crypto

FundingView makes finding opportunities easy. Paradex and Hyperliquid make execution simple.

Your first $100 is waiting.

Ready to start?

🚀 Find Opportunities on FundingView

📊 See Best Strategies

💰 Sign Up for Paradex

💰 Sign Up for Hyperliquid

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