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Perpetual swaps are futures contracts without expiry dates. They allow 24/7 trading and use funding rates to track asset prices, driving recent market growth.
Perpetual swaps, also known as perpetual futures, are derivative contracts that allow traders to buy or sell an asset at an unspecified point in the future without a set expiration date [1]. Unlike traditional futures, these instruments are cash-settled and can be held indefinitely, relying on periodic payments between long and short holders to maintain price alignment with the underlying asset [1]. Recent market data indicates a surge in their use, particularly for tokenized traditional assets like commodities and equities, where weekly trading volumes recently reached $30.7 billion [2].
Key takeaways
Perpetual futures function similarly to contracts for difference (CFDs) but are traded on a single exchange rather than directly with a broker [1]. The defining characteristic is the lack of a delivery date, which eliminates the need to roll over contracts and reduces basis risk associated with expiring futures [1]. To anchor the contract price to the underlying asset, a funding rate mechanism is employed where payments are exchanged between holders of long and short positions based on price differences [1]. The concept was first proposed by economist Robert Shiller in 1992 to create derivatives markets for illiquid assets like single-family homes, though the specific "inverse perpetual" variant was later developed by Alexey Bragin in 2011 for cryptocurrency exchanges [1].
While initially developed for the cryptocurrency sector, the application of perpetual swaps has expanded into traditional finance through tokenization [1]. These instruments appeal to investors by offering round-the-clock trading access to markets that typically operate on limited hours [2]. According to a report from BitMEX, trading volumes for tokenized perpetuals tied to commodities and equities surged in the first quarter of 2026, reaching $30.7 billion in weekly volume [2]. This growth was driven by macroeconomic volatility and geopolitical tensions, with oil perpetuals alone recording $6.9 billion in weekly volume following specific geopolitical events [2].
The rise of perpetual swaps represents a significant shift in how derivatives are traded, merging the flexibility of cryptocurrency markets with traditional assets. By removing expiry dates and enabling 24/7 trading, these contracts provide continuous hedging and speculation opportunities regardless of market hours [2]. As self-custodial wallet providers begin integrating these trading interfaces directly into applications, access to these complex financial instruments is becoming more widespread, potentially altering the landscape of both crypto and traditional derivatives markets [1].
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 2 outlets · Jun 12, 2026 · How we report
Traditional futures have a pre-specified delivery date and require rolling over contracts, whereas perpetual futures can be held indefinitely and use a funding mechanism to maintain price alignment.
The funding mechanism is used to periodically exchange payments between long and short holders to keep the perpetual contract price close to the underlying asset's price.
While perpetual futures markets primarily developed within the cryptocurrency sector, they are increasingly being used for pre-IPO stocks and were originally conceptualized for illiquid assets like real estate.
High-leverage trading can lead to rapid liquidations, and some platforms employ auto-deleveraging, where profitable traders may forfeit a portion of their gains to cover the losses of others during high volatility.