Plain English
A perpetual future (“perp”) is a derivative contract that tracks the price of an underlying asset but never expires. You can hold a position indefinitely, with leverage typically up to 50–100x. Funding payments keep the perp price aligned with spot. Dominant venues: Binance, Hyperliquid, Bybit, dYdX, GMX.
How it actually works
Each side (long, short) posts margin. The contract uses a funding rate paid between longs and shorts to anchor perp price to spot — positive funding when perps trade above spot (longs pay shorts), negative when below. Liquidation triggers when margin is exhausted; insurance funds backstop losses beyond zero.
What it means for you
Perps are the deepest liquidity venue in crypto by volume. For HNW use cases: hedging (short perps to offset spot exposure without selling), basis trading (long spot + short perp to capture funding), and tax-aware exposure (gain crypto exposure without buying spot in certain jurisdictions). High leverage is offered; using high leverage is rarely the right call.
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Educational content only. Not investment, tax, or legal advice.