Are Hyperliquid funding payments taxable?

The scale of the funding stream

Hyperliquid settles funding every hour between longs and shorts. Individually the amounts are cents or dollars; across a year of open positions they are a material line item. One wallet we measured paid $8.0M and received $0.25M in funding over a single active year — a stream that never appears in a fills export at all.

Funding lives on a dedicated endpoint (userFunding), not in trade fills. Any tool that only reads fills — and several popular ones do exactly that for Hyperliquid — reports a funding income line of $0.00. On an account that held positions, that zero is almost never correct; it is the single most reliable sign that an import dropped data silently.

How filers actually treat it

No tax authority has issued direct guidance on perp funding. Three treatments show up in practice:

• Ordinary income at receipt (conservative): funding received is ordinary income when it settles; funding paid is an expense. For investors the expense side can land in disallowed miscellaneous deductions — you may pick up the income without the offset.
• Netted into position PnL (aggressive): fold funding into the contract's P&L so it surfaces inside capital gain/loss at close. Operationally clean, but it converts ordinary income into capital gain — the kind of quiet recharacterization examiners notice.
• Swap-style annual netting: treat the perp as a swap contract and net the periodic payments. Elegant, but Hyperliquid perps almost certainly fail the Section 1256/notional-principal tests this relies on.

We don't pick a treatment for you — that is jurisdiction- and facts-specific. What we do is guarantee the underlying stream is complete: every funding event, signed correctly, per market, so whichever method your preparer chooses stands on real numbers.

What to check before you file

Open whatever report your tool produced and look at the funding line. If it is exactly zero on an account that held positions, the import is incomplete — verify the totals against a recomputation before filing on them.

Second check: fill coverage. The venue's fill API retains ~30 hours, so a 'full year' import built on it can silently hold two days of trades. Our check reports the fills source and coverage explicitly — full-history indexer or partial venue window — instead of letting the residual absorb what nobody fetched.