Perpetual futures (perps)

Unlike a classic future, a perpetual neither expires nor settles on a set date. The mechanism that anchors its price to spot is the funding rate: when the perp trades above spot, longs pay shorts, and the reverse when it trades below. It is a peer-to-peer transfer between positions on the same platform, commonly settled every eight hours on venues such as dYdX or Hyperliquid. The mark price, derived from aggregated spot oracle data, sets the unrealized PnL and the liquidation threshold, preventing liquidations driven by momentary manipulation of the trading price. The position is backed by margin and is liquidated if it falls below maintenance.

It is the most traded on-chain derivative in DeFi. It serves leveraged speculation and the hedging of spot positions without managing expiries or roll-over. Not every perp uses the same design: GMX applies no classic funding but a borrow-fee model scaled by pool utilization, and GMX V2 adds a rebate that produces an equivalent economic effect.

Real examples include dYdX, with its own appchain on Cosmos, GMX on Arbitrum and Avalanche, and Hyperliquid, with an on-chain order book on its own L1. A perpetual shares the liquidation mechanism with collateralized debt positions and money markets, though its collateral works as margin rather than overcollateralization in the strict sense. In the European Union, MiCA does not cover derivatives, which fall under financial-markets regulation.