What is a perpetual future?

A future that never expires

An ordinary future has a settlement date. On that date its price and the spot price must meet, and that certainty is what keeps them tied together beforehand — no matter how far they drift, the calendar closes the gap.

A perpetual has no such date. You can hold the position indefinitely, which is convenient, and it removes the one thing that anchored the price. Something else has to do that job.

What replaces the expiry date

The funding rate. At fixed intervals the side that is crowded pays the other side. Holding the popular side costs money, holding the unpopular one earns it, and that cost keeps pulling the contract back toward spot.

This is the trade-off of the instrument: you get a position with no deadline, and in exchange you pay rent whenever you are on the crowded side of it.

Mark price — the number that actually matters

A perpetual has two prices: the last traded price on that venue, and the mark price, which the exchange computes from an index of spot markets plus a funding component.

Liquidations are decided by the mark price, not by the last trade. This is deliberate: it makes it much harder to push one venue for a moment and liquidate positions that were never really underwater. It also means your position can survive a wick that visually pierced your liquidation level — and can be closed by a move you did not see on your own chart.

What you are actually trading

Not the coin. A perpetual is a contract whose value tracks the coin — you never hold the asset, and the number of contracts is not limited by how many coins exist. That is why open interest can exceed the circulating supply and why futures markets can move price far more than the underlying spot volume suggests.

It also means counterparty and venue matter. The contract is a promise from an exchange, settled in its rules, backed by its insurance fund.

Common questions

What is the difference between a perpetual and a spot position?

Spot means you own the coin. A perpetual is a contract that tracks the price, usually with leverage, that can be liquidated and that charges or pays funding while you hold it. The price exposure looks the same; the risks are not.

Why is the price different from spot?

Because it is a separate market with its own supply and demand. Funding is what keeps the gap small: the further the contract drifts from spot, the more expensive it becomes to hold the crowded side.

What is mark price and why does it differ from the chart?

Mark price is the exchange's reference price, built from an index of spot venues rather than from its own last trade. Liquidations use it, which protects positions from momentary local wicks — and means the number that decides your fate is not the one drawn on the candle.