Crypto Perpetual Futures (Perps), Explained

How perps work — funding rates, leverage, liquidation — and why they're the highest-risk product in crypto.

Reviewed by Stephan Kulik · Last updated: 2026-06-23 · How we rank

Key takeaways

A perp is a leveraged bet on price with no expiry — you never own the asset, and a funding rate keeps the contract tethered to spot.
Liquidation is the main danger: at high leverage a small adverse move wipes out your margin. Most retail perps traders lose money over time.
Per-trade fees are low (~0.01–0.02% maker), but the funding rate you pay every ~8 hours can dwarf them on a leveraged position.
Access is restricted in the EU, UK, and US — and this is speculation, not banking. For most people, spot ownership comes first.

What a perpetual future actually is

A perpetual future — a "perp" — is a contract that tracks a crypto asset's price and lets you take a leveraged long (betting up) or short (betting down) position without owning the asset. What makes it "perpetual" is that, unlike a traditional futures contract, it never expires. To keep a contract that never settles from drifting away from the real price, exchanges use a funding rate — a recurring payment between traders that anchors the perp to spot. Perps exist for speculation and hedging; they are not a way to invest in crypto itself. If you want to own the asset, that's spot trading.

The funding rate

Because there's no settlement date, the funding rate is how the perp price stays close to the underlying. Roughly every eight hours: if the perp trades above spot (longs are crowded), longs pay shorts; if it trades below spot (shorts are crowded), shorts pay longs. Each payment is usually small, but it compounds, and in a strongly one-sided market it becomes a real ongoing cost to hold a position — or a real income if you're on the other side. It's the rent you pay to keep leverage open over time. (The same mechanism underpins some "delta-neutral" yield products — see is USDe safe.)

Leverage and liquidation — where people get hurt

Leverage is the whole point of a perp, and the whole danger. You post margin (collateral) and control a much larger position. At 50x leverage, $200 of margin controls $10,000 of exposure — and a ~2% move against you wipes out the $200. When your losses approach your margin, the exchange liquidates you: it force-closes the position so your balance doesn't go negative, and your margin is gone. Two things make this worse than it sounds:

The liquidation price sits very close to entry at high leverage — so normal crypto volatility, which routinely produces double-digit daily moves, is enough to end the position.
Liquidations cascade. Forced closes push the price further in the same direction, triggering more liquidations — which is how sharp wicks and "liquidation cascades" happen.

You can also be liquidated on the mark price (a smoothed index of the wider market) rather than the last traded price on one venue, so a brief spike elsewhere can close you out. The honest summary: most retail perps traders lose money over time, and leverage is the reason.

Perps vs spot vs dated futures

Perpetual futures compared with spot trading and dated futures
Attribute	Spot	Perpetual future	Dated future
You own the asset	Yes	No	No
Expiry	None	None (perpetual)	Fixed date
Leverage	Usually none	High (often 20–100x+)	Yes
Ongoing cost	None	Funding rate (~8h)	Priced into the basis
Max loss	What you paid	Your margin (fast)	Your margin

CEX perps vs DEX perps

Perps trade on both centralized and decentralized venues, and the risk trade-off mirrors CEX vs DEX exactly. On a centralized exchange (Binance, Bybit, OKX) the company holds your margin — convenient and liquid, but you carry counterparty risk in that platform (Bybit itself suffered a ~$1.5B hack in early 2025; customer funds were restored). On a decentralized perps exchange like dYdX, a smart contract holds the margin — no company to fail, but you take on smart-contract risk and self-custody responsibility instead. As the CEX-vs-DEX framing puts it: a CEX trusts a company; a DEX trusts the code.

Where perps trade — and what they cost

Among the platforms we track, the main perps venues and their advertised terms:

Crypto perpetual futures venues, type, leverage, and fees
Venue	Type	Max leverage (advertised)	Perp fees (maker / taker)
Bybit	CEX	up to 100x	~0.01% / 0.06%
Binance	CEX	High	~0.02% / 0.05%
OKX	CEX	High	~0.02% / 0.05%
MEXC	CEX	up to 200x (select pairs)	Separate schedule
dYdX	DEX	up to 20x	~0.02% / 0.05%

Leverage and fee figures are as advertised by each platform and change frequently — see each exchange review and our fees guide.

Regulation — access is restricted

Crypto derivatives are treated more strictly than spot crypto in major Western markets. In the EU they generally fall outside MiCA and under the MiFID II regime, with heavy retail leverage limits — Bybit, for instance, restricts perpetual futures for EU retail clients. In the UK, the FCA does not permit crypto derivatives to be offered to retail consumers at all. In the US, retail access to offshore crypto perps is broadly restricted, and venues such as dYdX geofence US users from some features. Regulators that require derivative providers to publish retail-loss statistics consistently show that a high share of retail accounts lose money. Verify what is legal and available where you live before opening an account.

Should you trade perps?

Through this site's lens — which is about holding crypto safely — perps are the opposite end of the spectrum: maximum risk, maximum speed, and a structure that favours the house and experienced traders. For almost everyone the answer is to skip them, or at most treat them as speculation with money you can fully afford to lose. Get the foundations first: own spot, move long-term holdings to self-custody, and understand the broader risks in is crypto safe. If you do trade perps, start with minimal leverage and know your liquidation price before you open the position — not after.

This is general information, not financial advice

Perpetual futures are high-risk leveraged products that can lose your entire margin quickly. Nothing here is investment advice or a recommendation to trade derivatives, and platform terms, leverage limits, and the law in your jurisdiction change continually. Verify current rules and consider a qualified professional before trading. See our terms.

Frequently asked questions

What is a crypto perpetual future (perp)? +

A perpetual future ("perp") is a derivative that lets you bet on a crypto asset's price with leverage, without ever owning the asset — and, unlike a normal futures contract, it has no expiry date. A funding-rate mechanism (a small recurring payment between long and short traders) keeps the perp's price tethered to the underlying spot price so the contract can run indefinitely. Perps are a speculation and hedging tool, not an investment in crypto itself.

How does the funding rate work? +

Because a perp never settles, exchanges use funding payments to keep its price close to spot. Roughly every eight hours, if the perp trades above spot (more demand from longs), longs pay shorts; if it trades below spot, shorts pay longs. The rate is usually small but compounds — in a strongly one-sided market, funding can become a meaningful ongoing cost (or income) on top of any price move. It is the price you pay to hold a leveraged position open over time.

What is liquidation, and why is it the main danger? +

When you open a leveraged perp position you post collateral (margin). If the market moves against you and your losses approach that collateral, the exchange force-closes ("liquidates") your position to stop your balance going negative — and you lose the margin. With high leverage the liquidation point is very close to entry: at 50x, a ~2% adverse move can wipe out the position. Liquidations can also cascade — forced selling pushes the price further, triggering more liquidations. This is why most retail perps traders lose money over time.

What's the difference between perps and spot trading? +

Spot is buying the actual asset: you own the Bitcoin, your downside is limited to what you paid, and there is no expiry or funding cost. A perp is a leveraged bet on price direction: you don't own anything, you can lose your whole margin (and more, without protections) from a small move, and you pay or receive funding while the position is open. Spot is ownership; perps are amplified, time-decaying directional risk.

Where can I trade crypto perps? +

On centralized exchanges and on a few decentralized ones. Among the platforms we track, Bybit, Binance, and OKX are the main centralized perps venues (Bybit advertises up to 100x leverage; MEXC up to 200x on select pairs), and dYdX is the leading non-custodial perps DEX (up to 20x, no KYC). The choice mirrors the broader CEX-vs-DEX trade-off: a CEX means counterparty risk in the company holding your margin; a DEX means smart-contract risk in the code.

Can I trade perps in the EU, UK, or US? +

Access is restricted in major Western markets. In the EU, crypto derivatives generally fall outside MiCA and under the stricter MiFID II regime, and retail leverage is heavily limited — Bybit, for example, restricts perpetual futures for EU retail clients. In the UK, the FCA does not permit crypto derivatives to be sold to retail consumers. In the US, retail access to offshore crypto perps is broadly restricted, and platforms like dYdX geofence US users from some features. Always check what is legal and available in your jurisdiction before signing up.

How much do perps cost in fees? +

Two layers. Trading fees on the platforms we track are typically lower than spot: roughly 0.01–0.02% maker and 0.05–0.06% taker (e.g. Bybit ~0.01%/0.06%, Binance and OKX ~0.02%/0.05%). On top of that you pay (or receive) the funding rate every ~8 hours while the position is open, which on a leveraged notional can dwarf the trading fee. Cheap per-trade fees are not the same as cheap to hold.

Should a beginner trade perps? +

For almost everyone, no. Perps are the highest-risk product in crypto — leverage amplifies an already-volatile asset, liquidation can erase your stake from a small move, and the structure rewards the platform and experienced traders over newcomers. If you are learning crypto, spot ownership and self-custody come first. If you do trade perps, treat it as speculation with money you can fully afford to lose, start with minimal leverage, and understand exactly where your liquidation price sits before you open a position.