Funding Farming Automation — Earn Passive Yield from Perpetual Funding Rates

Discover how MagicTradeBot automates Funding Farming — an advanced strategy that leverages positive perpetual funding rates across major CEX exchanges like Binance and Bitget to generate continuous passive income with minimal risk.

💰 What Is Funding Farming Automation?

The Funding Farming Automation feature in MagicTradeBot enables users to earn passive yield by exploiting positive funding rates on supported centralized exchanges. The bot automatically tracks hundreds of trading pairs (e.g., 500+ pairs) and identifies those offering the highest funding rates, selecting the top-performing assets for automated farming.

Unlike typical directional trading, funding farming profits from the perpetual funding mechanism — without relying on market direction. It’s a continuous process designed to maximize earnings while minimizing exposure to volatile market swings.

⚙️ How It Works

  1. The bot continuously monitors all tradable pairs on supported exchanges for positive funding rates.
  2. It automatically ranks and selects top N pairs with the highest positive rates for potential farming.
  3. When a trade slot is available, the bot initiates a Spot Buy + Futures Short on the same asset, creating a delta-neutral hedge.
  4. The position remains open while funding stays positive, generating passive yield each funding cycle.
  5. If the funding rate turns negative or the short trade nears liquidation threshold, both positions are closed safely.

This cycle repeats automatically, ensuring your capital is continuously deployed toward the most profitable opportunities while maintaining strict risk controls.

🚀 Key Benefits

  • Hands-Free Automation: The bot autonomously scans, selects, and trades optimal pairs.
  • Passive Income: Earn continuous yield from positive funding payments without directional exposure.
  • Smart Risk Management: Automatically closes positions before negative funding or liquidation.
  • Wide Coverage: Supports major CEX platforms like Binance and Bitget.
  • Continuous Farming: Maintains cycle-based operation for long-term compounding returns.
Note: Funding Farming mode is not supported on wallet-based exchanges like Hyperliquid.

🧩 Configuration Example

You can enable and configure the Funding Farming Automation in the appsettings.yaml file as shown below: 

#################################################
# 2. FUNDING FARMING MODE
# ------------------------------------------------
# Automates funding farming for positive funding rates.
# NOTE: Not supported on Hyperliquid (wallet-based).
#################################################
FundingFarming:
  is_enabled: false
  max_open_trades: 5
  max_symbols_to_pick: 10          # Top N symbols with highest positive funding rates
  spot_order_size: 5000            # Spot order value in BaseCurrency
  future_order_size: 2500          # Future order value (50% of spot if leverage=2x)
  liquidation_percent: 5           # Close both spot/future if price nears 5% liquidation
  funding_rate_threshold: 0.03     # Minimum funding rate (e.g., 0.01 = 1%) for eligibility

🧠 Setup Instructions

  1. Open appsettings.yaml in your MagicTradeBot folder.
  2. Set is_enabled to true to activate funding farming mode.
  3. Adjust max_symbols_to_pick to define how many top-paying pairs to consider.
  4. Specify spot_order_size and future_order_size based on your capital allocation.
  5. Set funding_rate_threshold to the minimum rate eligible for farming (e.g., 0.01 = 1%).
  6. Save the configuration and start the bot — it will automatically begin farming positive funding opportunities.

🧭 Best Practices

  • Use a moderate leverage (2x–3x) to minimize liquidation risk.
  • Monitor funding rates daily for unusual fluctuations.
  • Combine with Smart Broadcast Notifications to get alerts for opened and closed farming positions.
  • Run the bot on stable internet connections for uninterrupted operation.

📈 Summary

The Funding Farming Automation feature in MagicTradeBot is designed for traders who want to earn consistent passive returns from positive funding rates on major exchanges. With built-in intelligence, automatic selection, and strong risk controls, it’s a powerful addition to any automated trading portfolio — offering steady yield generation with minimal market exposure.

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