Perpetual Futures
Derivative without expiry. Long/short positions on a price, leveraged, financed via funding-rate payments between the long and short side.
What is a perp?
A perpetual future is a futures contract without an expiry date. Invented in 2016 by BitMEX, it has since become the dominant crypto trading contract.
Core properties:
- No expiry — the position can in theory stay open indefinitely.
- Leverage — typically 1–50x via initial margin.
- Long & short — without borrowing: simply open a contract in the desired direction.
- Funding rate — the mechanism that ties the perp price to the spot price.
Funding rate
To keep the perp price from diverging from the spot price, every X hours (on Hyperliquid: hourly) the advantaged side pays the disadvantaged side:
- Perp > spot (premium) ⇒ longs pay shorts. Incentivizes shorts to trade away the premium.
- Perp < spot (discount) ⇒ shorts pay longs.
Funding is automatically debited from / credited to open positions. Negligible on short holding periods, noticeable on multi-day positions.
Hyperliquid perps
Botty trades on Hyperliquid perpetuals: - Settle currency: USDC - Leverage: up to 50x for BTC/ETH - API: REST + WebSocket - Order types: market, limit, stop (reduce-only)
Perp vs. spot — differences
| Aspect | Spot | Perp |
|---|---|---|
| Asset | actual coin | contract on the price |
| Leverage | usually 1x (or margin borrowing) | up to 50x |
| Short | only via borrowing / lending | direct |
| Expiry | — | none |
| Funding | — | hourly (Hyperliquid) |
| Wallet/custody | actual coin in the wallet | margin account at the exchange |