Perpetual Futures Explained: How They Work and Why Traders Use Them

When you trade perpetual futures, a type of derivative contract that never expires and lets traders go long or short on crypto without owning the underlying asset. Also known as perps, they’re the backbone of most decentralized exchanges today because they let you trade with leverage, 24/7, without worrying about contract rollovers. Unlike regular futures that expire on a set date, perpetual futures stick around indefinitely—making them perfect for crypto traders who want to hold positions for weeks or months without closing and reopening contracts.

What keeps these contracts from drifting too far from the real price of Bitcoin or Ethereum? The funding rate, a periodic payment exchanged between long and short traders to align the perpetual price with the spot market. If longs are paying shorts, it means the market is overbought. If shorts are paying longs, the market might be oversold. This simple mechanism keeps prices honest without needing an expiration date. You’ll see this in action on platforms like VoltSwap or other DeFi exchanges where traders use leveraged trading, the practice of borrowing funds to increase position size beyond what your wallet balance allows. It’s powerful—but it’s also dangerous if you don’t understand liquidation risk.

Most of the posts in this collection show how traders navigate these systems. Some warn about shady exchanges that fake volume to trap beginners. Others explain how tools like fee estimators help you avoid overpaying on gas when opening or closing positions. You’ll find real examples of platforms that use perpetuals well—and others that are outright scams. Whether you’re new to trading or have been around since the first DeFi summer, understanding how perpetual futures work helps you spot the difference between real opportunity and noise.

What you’ll find here isn’t theory. It’s what happens when people actually trade these contracts: the wins, the losses, the hidden fees, the scams pretending to be airdrops tied to leveraged pools. If you’ve ever wondered why your position got liquidated overnight, or why funding rates spiked during a market rally, the answers are in these posts. No fluff. No hype. Just what you need to know before you click ‘Buy’ or ‘Sell’ on your next perp.