Perpetual futures

A perpetual future is a contract that follows the price of a coin, can be traded with borrowed money, and never comes due. A normal futures contract has an expiry date, and on that date its price and the price of the thing it tracks must meet. A perpetual has no such date. Think of a lease with no end: you can hold it for an hour or for a year, and nothing forces you out.

Without an expiry, something else has to keep the contract's price glued to the coin's price. That something is the funding rate: every eight hours, whichever side is more crowded pays the other a small fee, which nudges traders back toward balance. So a perpetual is really two things at once, a bet on the coin's direction and a stream of small payments that depends on how crowded that bet is.

In the logbook, perpetuals are the venue for most crypto tests. They matter because they are where leverage lives: the crowd that pays funding is the crowd in a hurry, and that crowd is what several of our ideas tried to be on the other side of.