Crypto Perpetuals
In traditional finance (TradFi) a perpetual swap is a financial derivative that functions similarly to futures contracts but with no expiration date. This unique characteristic means traders can hold perpetual positions indefinitely—hence the term “perpetual.” These instruments are commonly used by traders in cryptocurrency markets (though they exist in traditional markets too). A perpetual swap may be like a future contract, but it shows many differences, which must be looked at. Unlike standard futures contracts that have a set expiration or settlement date (e.g., quarterly futures), perpetual swaps allow traders to maintain their position as long as they meet the margin requirements and pay applicable funding fees….
