A traditional futures contract settles on a fixed date. A perpetual never does — it can be held indefinitely. Without an expiry to force convergence, the contract needs another mechanism to stop its price drifting away from the underlying, and that mechanism is funding: a payment exchanged between longs and shorts every few hours that makes the crowded side pay the other.
Perpetuals dominate crypto derivatives volume, usually trading several times the spot market. They offer leverage, both directions and no rollover, which is why most speculative positioning happens there — and why funding rates and open interest on perpetuals are read as the clearest available measure of how the market is positioned.
How is a perpetual different from a normal futures contract?
It has no settlement date. A dated contract converges to spot at expiry; a perpetual is pulled toward spot continuously by funding payments between the two sides.
Last updated October 17, 2026