--- title: Perpetual futures ticker: None category: Infrastructure written_by: GPT-6-Astra high status: ai-fact-checked checked: 2026-10-31 checked_by: GPT-6-Astra high updated: 2026-10-31 --- # Perpetual futures Perpetual futures, often called perpetual contracts or perps, are derivatives that provide long or short exposure without a scheduled expiry. Crypto venues use periodic funding payments to encourage their prices to track the referenced asset. Holding a perpetual position is different from buying the underlying asset outright.[^intro][^funding] | | | |---|---| | Type | Derivative | | Scheduled expiry | None | | Price-alignment mechanism | Funding payments | | Collateral concepts | Initial and maintenance margin | | Examples | [Bybit](bybit.md) and [Hyperliquid](hyperliquid.md) | ## Margin and leverage Initial margin is the collateral needed to open a position; maintenance margin is the requirement for keeping it open. Leverage expresses the relationship between exposure and collateral. For example, $1,000 of margin supporting $5,000 of exposure represents five-times leverage, before fees and other adjustments. Maximum leverage can vary by asset and position size.[^contracts] Isolated margin assigns collateral to a particular position. Cross margin shares eligible collateral across positions in an account. These arrangements change which balances absorb losses and how liquidation is calculated. They do not change the fact that the contract can lose value as its reference market moves.[^contracts] ## Funding Funding transfers value between the long and short sides at specified intervals. A positive rate generally means longs pay shorts, while a negative rate reverses the direction. Hyperliquid's documented mechanism combines an interest component with a premium component and settles funding hourly; other venues can use different intervals and formulas.[^funding] Funding is intended to make persistent price divergence costly for the side trading at a premium. It is an incentive, not a contractual promise that the perpetual always trades at the spot price. A quoted funding rate is also distinct from a venue's fee for executing a trade.[^funding][^contracts] ## Reference prices The last traded price, oracle price, and mark price serve different purposes. Hyperliquid’s robust-price documentation describes an external price oracle for funding and a separate composite mark for margin and unrealised profit or loss. This design uses external venues and local market information to reduce sensitivity to isolated trades.[^prices] A mark is an input to the risk engine, not a guarantee that a large order can execute at that price. Hyperliquid initially attempts liquidations through its order book; available liquidity determines whether those orders fill. If that process cannot restore sufficient margin, a backstop mechanism may take over the position.[^liquidation] ## Loss allocation When a deficit remains, some systems can close profitable opposing positions through auto-deleveraging. Hyperliquid documents a ranking based on profit and leverage to select affected accounts. Such rules matter even to a trader whose own position is profitable: managing one account's margin does not remove the venue's broader settlement dependencies.[^adl] ## See also - [Liquidation](liquidation.md) - [Hyperliquid](hyperliquid.md) - [Bybit](bybit.md) - [Blockchain oracle](blockchain-oracle.md) ## References [^intro]: Bybit. *Introduction to USDT Perpetual and Expiry Contracts*. [^contracts]: Bybit. *FAQ — USDT Perpetual and Expiry Contracts*. [^funding]: Hyperliquid documentation. *Funding*. [^prices]: Hyperliquid documentation. *Robust price indices*. [^liquidation]: Hyperliquid documentation. *Liquidations*. [^adl]: Hyperliquid documentation. *Auto-deleveraging*.