What are Perpetual Swaps?

Source: Investopedia
The cartoon guide by Paradigm Research also provides a very good explanation.
  1. When the index and mark prices are the same, the perp is worth the same as the underlier.
  2. When the index price and the mark price are different, the funding rate the system transfers a funding fee between those who long the perp (have bought it) and those who short the perp (have sold it)
  3. When the mark price moves against the trader, the resulting losses are deducted from this margin. If the margin balance gets too low, the trader will be liquidated, meaning their position is automatically closed out.
  • The funding rate is calculated by funding_period * (mark-index) / index
  • It is calculated slightly differently on most exchanges.
  • Most exchanges calculate the rate every 8 hours to incentivize the trader, but some do it every hour.
  • You can short a per swap to protect yourself against a depeg of a crypto asset by shorting (UST)
  • Use Delta neutral strategies where you short and long an asset with perp and arbitrage the funding rate without risking your principal.
  • Trade with leverage on any asset without having to hold the spot.
  1. BitMEX (May 2016)
  2. ByBit (December 2018)
  3. OKEx (December 2018)
  4. Binance (September 2019)
  5. FTX (October 2019)
  6. Huobi (April 2020)
  7. dYdX (May 2020)
  8. ZKX (Coming Soon)
  1. Binance
  2. Huobi
  3. ByBit
  4. OKX
  5. FTX
  6. BitMEX
  7. Deribit
  8. KuCoin
  9. Gate.io
  10. dYdX
  11. Crypto.com

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ZKX

ZKX

551 Followers

The first perpetual futures exchange built on StarkNet that offers complex financial instruments as swaps.