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A perpetual future — a perp — is a derivative that tracks the price of an asset without ever expiring. You take a long or short position sized in notional terms, post margin against it, and hold it indefinitely. You never hold the underlying asset. Perps are the highest-volume product in crypto trading, typically several times spot volume. If you are analyzing crypto market activity and only looking at spot, you are looking at the smaller half.

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Why they exist

A traditional future has a settlement date, so its price converges to spot as expiry approaches. Remove expiry and nothing forces convergence — the perp price can drift arbitrarily far from the asset it is supposed to track. Funding is the mechanism that replaces expiry. At a regular interval, whichever side is in the majority pays the other:
  • Perp trading above the index price → funding is positive → longs pay shorts
  • Perp trading below the index price → funding is negative → shorts pay longs
The payment makes the crowded side expensive to hold, which pushes the price back toward the index. Funding is paid between traders, not to the venue, and intervals vary — hourly on some venues, every eight hours on others.
Funding rate is one of the most-used sentiment signals in crypto. Sustained positive funding means traders are paying to stay long — leverage is skewed bullish and the position is crowded. Sharp funding reversals often accompany liquidation cascades.

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Leverage and liquidation

Perps let you control a position much larger than the margin backing it. Margin of $1,000 at 10x controls $10,000 of exposure, so a 1% move in the underlying is a 10% move in your equity. The consequence is liquidation. Every position has a maintenance margin requirement; when your equity falls below it, the venue force-closes the position rather than letting the account go negative. You keep whatever margin remains after the close, which after a fast move may be nothing. Liquidations are reflexive at the market level. Forced closes are market orders in the direction the price is already moving, which pushes the price further, which triggers more liquidations. This is why crypto drawdowns are sharp and why liquidation data is worth watching on its own.

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The vocabulary

The full glossary, with the unit conventions that differ per venue, is at Perpetuals concepts.

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Onchain vs offchain perps

Centralized venues run perps on internal systems, and their data reaches you only through their APIs. Onchain perp venues put some or all of the lifecycle on a chain, which makes it independently observable. They split into two designs, both covered in AMMs vs CLOBs:
  • Order-book venues — Hyperliquid, Lighter, dYdX. A book of resting orders, matched into fills. Usually on an appchain built for the throughput a book requires.
  • Pool-based venues — GMX, Jupiter Perps. Traders take positions against a shared liquidity pool rather than a counterparty, with the pool taking the other side.

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Where to look in Allium

Allium normalizes perp activity across venues into a single set of tables.
Notional and contract units are not standardized across venues. One venue quotes size in the base asset, another in USD, another in contracts of a fixed multiple. Always read the unit from the venue’s table page before comparing or summing across venues.

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