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What is Perpetual Swap (Perps)?
A perpetual swap is a crypto futures contract with no expiration date. You can hold it indefinitely, but pay or receive a funding rate every 8 hours.
Full Explanation
Perpetual swaps (perps) are the most popular derivative in crypto. Unlike traditional futures that expire on a date, perps never expire. They track the spot price through a funding rate mechanism: when perps trade above spot (bullish crowd), longs pay shorts. When perps trade below spot (bearish crowd), shorts pay longs. This keeps the perp price close to spot. Perps allow leverage (2x-100x), meaning you can control large positions with small capital — but liquidation risk is real.
Example
Going 5x long on BTC perps with ₹10,000 margin gives you ₹50,000 of BTC exposure. A 20% BTC drop would liquidate your entire ₹10,000.
Related Terms
Last updated: 2026-03-21
