Definition
A perpetual future (a "perp") is a futures contract with no expiry date. Like any future, it lets you bet on a coin's price going up (long) or down (short) without owning the coin, usually with leverage. Unlike a quarterly future, it never settles: a position stays open until you close it or it is liquidated. Perps are the most traded crypto derivative on Binance, Bybit and Hyperliquid, and most of the open interest and liquidations on this site come from them.
How funding anchors the price to spot
Because a perp never expires, nothing forces its price to meet spot on a set date. The funding rate does that job. At fixed times, traders on one side pay traders on the other: when the perp trades above the spot index, funding is positive and longs pay shorts; when it trades below, funding is negative and shorts pay longs. Paying to stay on the crowded side pushes traders to close it, which pulls the perp back toward spot. The gap itself is the basis.
A position pays or receives position value × funding rate at each funding time. Binance and Bybit settle every 8 or 4 hours depending on the contract (BTC every 8); Hyperliquid settles every hour. This site shows every rate as its 8-hour equivalent so venues compare.
Mark price and index price
A perp has three prices. The last price is the latest trade. The index price is a weighted average of spot prices on several exchanges, the "fair" value the perp is anchored to. The mark price is derived from the index and the perp's own premium; exchanges use it, not the last trade, to value open positions and trigger liquidations, so a single thin trade cannot liquidate you.
Leverage, margin and liquidation
You open a perp position by posting margin, a fraction of the position's value. At 10× leverage, $1,000 of margin controls a $10,000 position. Each exchange sets a maintenance margin: if losses (and funding paid) shrink your margin below it, the exchange closes the position at the mark price. That forced close is a liquidation. Higher leverage puts the liquidation price closer to the entry; the liquidation price calculator shows where it sits for a given entry, leverage and exchange. Isolated margin risks only the margin in one position; cross margin can use your whole balance.
Worked example: BTC today
Live numbers from the box above. BTC perps currently average 0.0044% funding per 8 hours, weighted by open interest (4.8% a year without compounding). A $10,000 long BTC perp position pays about $0.44 per 8 hours, about $1.31 a day if the rate held; a short of the same size does the opposite. With 10× leverage that position needs $10,000 ÷ 10 of margin, and a price drop of a little under 10% (less after fees and funding) would bring it to liquidation.
Funding changes every interval, so these are a snapshot, not a forecast. Open interest across all BTC perps shows how much money sits in such positions; see BTC open interest and BTC funding for history.
Perpetuals vs quarterly futures vs spot
| Perpetual | Quarterly future | Spot | |
|---|---|---|---|
| Expiry | None | Fixed date | None |
| Held near spot by | Funding payments | Convergence at expiry | Is spot |
| Holding cost | Funding each interval | Premium or discount | Fees only |
| Short and leverage | Yes | Yes | Only on margin |
| Liquidation | Yes | Yes | Only on margin |
A quarterly future's premium to spot shrinks to zero by its expiry date; plotting it across expiries gives the futures curve, explained in futures curves and calendar spreads. A perp has no such date, so its cost shows up as funding instead.
Limits and risks
- Leverage cuts both ways. A small move against a highly leveraged position can liquidate it and lose the whole margin.
- Funding is not fixed. The rate is set from the premium each interval and can jump in fast markets; a carry that looks cheap today can become expensive.
- Each exchange runs its own contract. Index sources, mark-price rules, funding caps, intervals and margin tiers differ by venue, so the same coin can trade at a different price and funding on each.
- Auto-deleveraging. When an insurance fund cannot absorb a liquidation, exchanges can close profitable positions on the other side (ADL).
- This page explains how the contracts work. It is not a recommendation to trade them and not financial advice.
Checked against the exchanges' own documentation on 19 October 2026: Binance: introduction to funding rates · Bybit: introduction to funding rate · Hyperliquid: funding · Hyperliquid: margining. Not financial advice.