What Is a Perpetual Contract in Crypto?

When crypto traders say 'futures', they almost always mean perpetual contracts, or perps. It is the product behind nearly every big exchange bonus, and most beginners trade it without really knowing what it is. So here is the plain version.

A perpetual is a contract that tracks the price of an asset, say Bitcoin, so you can bet on it going up or down with leverage, without ever owning the coin. Traditional futures expire on a set date. Perps, as the name says, never expire, so you can hold a position as long as you keep enough margin. That is the whole appeal: leverage, both directions, no deadline.

With no expiry, something has to stop the contract price drifting away from the real spot price. That job belongs to the funding rate: a small payment that changes hands between long and short traders every few hours. When perps trade above spot, longs pay shorts; when below, shorts pay longs. It quietly nudges the price back in line, and it is a real cost to factor in if you hold a position for a while.

Perps are where the leverage, the liquidations, and the big USDT bonuses all live. That makes them powerful and dangerous in equal measure. If you are going to trade them, keep leverage low, use a stop-loss, and remember the funding rate is nibbling at long-held positions. Compare the perp fees across exchanges on our leaderboard before you pick one.