What Is a Perpetual Futures Contract?

A perpetual futures contract is a futures contract with no expiry date, held near spot by a funding payment that longs and shorts exchange at a set interval.

The funding rate belongs to one instrument, the perpetual contract, and open interest and liquidation totals in crypto are usually quoted for it as well. This page covers what that contract is, how a periodic funding payment stands in for an expiry date, which of its three quoted prices is used for what, and how it differs from a dated future. It is descriptive throughout.

What a perpetual contract is

A perpetual contract is a standardized derivative traded on an exchange, quoted against an index of spot prices, with no delivery date and no settlement date. A position in one is not a claim on the asset: it is an agreement whose value moves with the index, settled in cash against the margin posted. Nothing in the contract forces it to end, so it stays open until the trader closes it or the exchange closes it by force.

That is the structural break from a dated futures contract, where the exchange fixes a delivery month and the position resolves on a stated day. Without that date, the mechanism that pulls a dated future toward spot disappears, and funding is what the venues put in its place.

Funding, the mechanism that replaces expiry

A dated future converges on spot because its settlement procedure forces the two prices together on a known day. At expiry it either delivers the goods or cash-settles against a reference price, so a wide gap is arbitraged away as the date approaches. A perpetual has no such date, so venues close the gap with a recurring payment instead.

The rate is computed on an eight-hour basis at the major venues, and the settlement cadence differs by venue: Binance, Bybit and OKX settle funding every eight hours on their Bitcoin contracts, while Hyperliquid settles every hour at one eighth of the computed rate. At each settlement the exchange compares the perpetual's price with its index. When the perpetual trades above the index, long positions pay short positions. When it trades below, shorts pay longs. The payment is a percentage of position notional and moves between the two sides, and only positions open at the settlement timestamp pay or receive.

The effect is a running cost on the crowded side, and that cost is what pulls the quoted price back toward the index.

Funding is quoted per eight-hour interval, which makes the headline number look tiny. Three eight-hour intervals a day across 365 days is 1,095 a year, so the annualized figure is the per-interval rate multiplied by 1,095.

Mark price, last price and index price

Three prices sit on the same contract and are not interchangeable.

• Last price is the most recent trade printed on that venue's own order book.
• Index price is a composite of spot prices from several exchanges, the thing the contract is built to track.
• Mark price is built from the index plus a basis component, which at the major venues decays toward zero across the funding interval.

Unrealised profit and loss and the liquidation check both run off the mark price, for manipulation resistance. A single large order on one thin book can move the last price for a few seconds, and a check keyed to that print could be pushed on purpose. A multi-exchange index is harder to move for long enough to matter.

Margin, leverage and forced closure

Perpetuals are margined instruments. A trader posts collateral worth a fraction of the position's notional value, which is where the leverage comes from, and the exchange sets a maintenance margin the position must stay above. When losses eat past that threshold, the venue's risk engine closes the position at market. That forced close, and the cascades it can set off, are covered in what a crypto liquidation is.

How a perpetual differs from a dated future

• No expiry, so no roll. A dated market's price history is a chain of separate contracts spliced at each roll date. A perpetual is one continuous instrument.
• No delivery and no notice day. Nothing has to be stored, shipped or tendered.
• Positions build. Because contracts never settle, open interest can grow across months rather than resetting at each expiry.
• The curve collapses into one number. On a dated market, carry shows in the spread between delivery months, which is what contango and backwardation describe. A perpetual has a single contract and no months to compare, so the same information surfaces in the funding rate.

The three perpetual series read together describe positioning from different angles: open interest sizes what is committed, funding says which side pays to hold, and liquidations record which side was closed by force. Funding next to the long and short split is covered in the funding rate and long/short ratio.

A worked example from 14 September 2026

The figures below come from Kresmion's derivatives and liquidation feeds, which record perpetual open interest and OI-weighted funding for Bitcoin, Ethereum and other major coins across Binance, Bybit, Hyperliquid and OKX plus a single-venue liquidation tape, on the signed-in crypto derivatives pages. A worked reading of the ETH book at a window record, with the funding rate beside it, is in Kresmion's September 14 brief.

At about 07:18 UTC on 2026-09-14, Bitcoin perpetual open interest across those four venues was about $17.45 billion, and Ethereum about $12.09 billion. OI-weighted funding was positive on both, 0.0089% for Bitcoin and 0.0083% for Ethereum on an eight-hour equivalent basis, so longs were paying shorts on each.

One venue shows the arithmetic. At 07:23 UTC on 2026-09-14 the Binance Bitcoin perpetual funding rate was 0.00009225 per eight-hour interval, or 0.009225%, against a mark price of $77,677.80. Annualize it by multiplying by the 1,095 intervals in a year: 0.00009225 x 1095 = 0.1010, about 10.1% a year before compounding. The Binance Ethereum contract was 0.00008467 (0.008467%) against a mark price of $2,520.29, about 9.3% annualized.

In the 24 hours to about 07:18 UTC on 2026-09-14, the liquidation feed recorded 1,983 sell-side events, long positions closed by force, worth about $18.88 million, against 1,267 buy-side events, shorts closed by force, worth about $7.45 million. That feed is single venue (OKX) across BTC, ETH, SOL, XRP and DOGE, so it is a single-venue proxy, not a market-wide total.

Read descriptively: a large amount of notional sat open, the side paying funding was long, and the side closed by force over the previous day was also long. None of it states where either price settles next.

Key takeaways

Frequently asked questions

Is a perpetual contract the same as a dated futures contract?

No. Both are exchange-traded derivatives carrying margin and leverage, but a dated future has a delivery month and resolves on a stated day, while a perpetual has neither. That difference is why a dated market needs a roll and a perpetual does not, and why a perpetual needs funding.

Who pays the funding rate, and how often?

The payment moves between traders on the two sides of the contract. The rate is computed on an eight-hour basis at the major venues, though the settlement cadence differs: Binance, Bybit and OKX settle every eight hours on their Bitcoin contracts, while Hyperliquid settles every hour at one eighth of the computed rate. When the perpetual trades above its index the rate is positive and longs pay shorts, and when it trades below, the rate is negative and shorts pay longs.

Why do liquidations use the mark price instead of the last traded price?

The last price is whatever most recently traded on one venue's order book, which a single large order can move for a moment. The mark price is built from a multi-exchange index plus a decaying basis, so pushing it is far more costly. Keying the check to it stops one book's momentary print from forcing positions out.

What happens to a perpetual position that is never closed?

It stays open. There is no date at which the exchange settles it, so the position keeps marking against the index and funding is paid or received each interval. It ends only when the trader closes it, or when the margin falls below maintenance and the exchange closes it by force.

Does the funding rate predict which way price moves?

No. It describes, it does not forecast. A positive rate says the contract is trading above its index and longs are paying to hold it, which measures what positioning costs at that moment rather than where the price travels next. This page is information, not investment advice.

--- Source: Kresmion derivatives feed (perpetual open interest and OI-weighted funding across Binance, Bybit, Hyperliquid and OKX), 2026-09-14 at about 07:18 UTC, with Binance funding rates and mark prices at 07:23 UTC; Kresmion perpetual liquidation feed (OKX; BTC, ETH, SOL, XRP, DOGE), 24 hours to about 07:18 UTC on 2026-09-14. Kresmion Research.