Perpetual futures (perps)

Perpetual futures, often called "perps", are futures contracts with no expiry date. They were popularised by the exchange BitMEX in 2016 and are now the most traded product in crypto by volume.

Because a perpetual never expires, it needs another way to keep its price close to the spot price. That is the job of the funding rate: at regular intervals, typically every eight hours, traders on one side pay those on the other. When the perpetual trades above spot, longs pay shorts, which encourages selling; when it trades below, shorts pay longs.

Perps allow high leverage, sometimes 50x or more, and positions are marked against an index price drawn from several spot exchanges. This makes them powerful but dangerous for beginners: a small move against a highly leveraged position wipes out the margin and triggers liquidation. Decentralised perpetual exchanges, such as Hyperliquid and dYdX, offer similar products on-chain.