PerpAtlas Research · July 18, 2026 · A plain explainer, with the real costs
A perpetual future ("perp") is a contract that tracks the price of an asset — say Bitcoin — and
lets you take a leveraged long or short position on it, with no expiry date. It's
the most-traded product in crypto. Here's what it actually is, stripped of hype.
The core idea
A normal ("dated") future settles on a fixed date, which pulls its price toward spot as expiry
nears. A perpetual never expires, so it needs a different mechanism to stay tethered to the real
(spot) price. That mechanism is funding: a small payment exchanged directly between
longs and shorts, usually every 1–8 hours. When the perp trades above spot, longs pay shorts (a cost
to be long); when it trades below, shorts pay longs. This constant nudge keeps the perp roughly in
line with the underlying. Funding is the defining feature of a perp —
how it works, with numbers.
Leverage: the appeal and the trap
You open a position by posting margin — a fraction of the position's value. Post 5% and
you're at 20x leverage: a 1% move in your favor is a 20% gain on your margin, and a 1% move against
you is a 20% loss. Exchanges advertise up to 100–150x, but that headline only applies to small
positions, and higher leverage means a tiny adverse move wipes you out
(why max leverage is a marketing number).
The three costs
Trading fees — paid each time you open or close. At base tier these run
0.02% to make and 0.05–0.06% to take, depending on venue
(verified table). Small per trade, large if you trade often.
Funding — paid (or received) every settlement while you hold. For anything held
more than a day this usually dwarfs the trading fee: a $100k BTC long paid $287–474 in funding over a
recent month depending on venue, versus ~$50–60 to open it.
Liquidation — if the market moves against you enough that your margin falls to
the maintenance requirement, the exchange force-closes your position and charges a liquidation fee.
You can lose your entire margin (how liquidation
works).
Long and short, concretely
Going long profits if price rises; going short profits if it
falls. Shorting a perp needs no borrow — you simply open a short contract. Because funding in crypto
is positive more often than not, being short has also tended to collect a small running
carry (shorts got paid in 63–76% of periods on a
majors basket) — though that is a small tilt, not a strategy on its own.
The honest part: leverage cuts both ways and most leveraged retail traders lose money over time. The
maths is unforgiving — fees and funding are a constant drag, liquidation is permanent, and high
leverage means normal volatility can end your position before your thesis plays out. Perps are a tool
for sizing and hedging, not a shortcut to returns.
If you're going to trade them anyway
Use leverage you'd survive a normal daily move at — for most that's low single digits, not 50x.
Know your liquidation price before you enter, and that funding walks it toward you as you hold.
Pick the venue by your real cost: taker fee if you scalp, funding if you hold
(cheapest by profile).
Never risk money you can't afford to lose entirely.