Perpetual Futures(Perps)
Futures contracts with no expiration date that track an underlying asset's price through a funding rate mechanism.
In-Depth Explanation
Perps are crypto's most traded derivative. Unlike traditional futures that expire, perps use funding rates—periodic payments between longs and shorts—to keep prices aligned with spot. When perps trade above spot, longs pay shorts (and vice versa). This creates arbitrage opportunities and reveals market sentiment. GMX, dYdX, and Hyperliquid are major perps venues.
Related Terms
Funding Rate
Periodic payments exchanged between long and short positions in perpetual futures to keep prices anchored to spot.
Leverage
Using borrowed capital to amplify potential returns (and losses) on an investment position.
Liquidation
Forced closure of an undercollateralized position, typically with a penalty to the borrower.
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