How Perpetual Futures Work and Why They Matter in Crypto
Original title: How Perpetual Futures Work and Why They Matter
4:55
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Summary
Perpetual futures have become one of crypto's biggest markets. In 2025, the top 10 centralized exchanges processed $86.2 trillion in perp volume, while leading decentralized exchanges processed $6.7 trillion. A perpetual future is a futures contract with no expiration date. The format has become a crypto-native hit and is now moving onchain. The history of these contracts stretches from bucket shops and contracts for difference to Robert Shiller's 1993 proposal and BitMEX, which first popularized crypto perps. Perp mechanics include synthetic exposure, long and short positions, leverage and liquidation, funding rates, and oracles. Funding rates affect prices. Perps fit 24/7 markets. One open question is whether decentralized venues could become a new source of price discovery for commodities and other real-world assets. Another question is whether traditional finance institutions could adopt perps. In the U.S., perpetual futures contracts are currently regulated as derivatives under the U.S. Commodity Exchange Act. They may only be offered to U.S. persons through CFTC-registered designated contract markets. A small number of U.S.-regulated platforms offer similar products to U.S. persons, while most centralized exchanges and all decentralized exchanges restrict U.S. persons' access to such products.
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Key points
- In 2025, the top 10 centralized exchanges processed $86.2 trillion in perp volume, while leading decentralized exchanges processed $6.7 trillion.
- Perpetual futures are futures contracts with no expiration date and have become a crypto-native market.
- The history of perps includes bucket shops, contracts for difference, Robert Shiller's 1993 proposal, and BitMEX, which first popularized crypto perps.
- Perp mechanics include synthetic exposure, long and short positions, leverage and liquidation, funding rates, and oracles.
- Perps fit 24/7 markets, and decentralized venues could become a source of price discovery for commodities and other real-world assets.
- In the U.S., perpetual futures are regulated as derivatives under the U.S. Commodity Exchange Act and may only be offered to U.S. persons through CFTC-registered designated contract markets; most centralized exchanges and all decentralized exchanges restrict U.S. access.
Chapters
Chapters come from the timestamps in the video description.
Questions
What are perpetual futures?
Perpetual futures are futures contracts with no expiration date.
What volume did perpetual futures markets process in 2025?
In 2025, the top 10 centralized exchanges processed $86.2 trillion in perp volume, while leading decentralized exchanges processed $6.7 trillion.
How are perpetual futures regulated in the U.S.?
They are regulated as derivatives under the U.S. Commodity Exchange Act. They may only be offered to U.S. persons through CFTC-registered designated contract markets. Most centralized exchanges and all decentralized exchanges restrict U.S. persons' access to such products.
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