Perpetual Futures
a.k.a. Perps, Perpetual swaps
Futures contracts with no expiry date, kept in line with the spot price by regular funding payments between longs and shorts.
Perpetual futures ("perps") are the dominant way people trade crypto with leverage. Normal futures expire on a set date. Perps never do. To stop their price drifting away from the real (spot) price, exchanges use a funding rate: every few hours, one side pays the other.
If the perp trades above spot because everyone is piling in long, longs pay shorts, which nudges the price back. It is similar to the swap a forex trader pays to hold a position overnight. High leverage plus 24/7 markets mean liquidations can cascade violently.
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