Perpetual Futures

Perpetual futures (or perpetual swaps) are a type of derivative contract unique to cryptocurrency markets that allows traders to speculate on the price of an asset with leverage, without an expiry date. Unlike traditional futures that settle at a set date, perpetual contracts can be held indefinitely. They use a funding rate mechanism to keep the contract price aligned with the spot price: when the contract trades above spot, longs pay shorts, and vice versa. Perpetual futures are the most traded instrument in crypto markets.