What is Perpetual Futures?
A derivative contract that lets you speculate on an asset's price with leverage — with no expiry date, kept in sync with spot via a funding rate.
Perpetual futures (also called perps) are the most popular instrument on crypto derivatives exchanges like Binance, Bybit, and OKX. Unlike traditional futures, they never expire — you can hold them indefinitely.
How they stay pegged to spot price:
Exchanges use a funding rate — paid every 8 hours between longs and shorts — to keep the perpetual price close to the spot price:
Key mechanics:
| Feature | Perpetual Futures | Spot |
|---|---|---|
| Leverage | Yes (up to 100×) | Usually no |
| Expiry | None | N/A |
| Funding rate | Yes (every 8h) | No |
| Short selling | Easy | Hard/impossible |
Funding rate impact:
On a $10,000 long position with a 0.01% funding rate every 8 hours:
Cost per day = $10,000 × 0.01% × 3 = **$3/day** or ~$90/month
High funding rates (0.05%+) make holding longs expensive. Factor this in on longer-term leveraged positions.