The similarities between perpetual and delivery contracts

Both can be used to achieve hedging. They are all derivatives of crypto assets and can be used to hedge spot risk. If you hold BTC spot and are worried about the risk of BTC falling, you can hedge your risk by shorting the contract.



Both can be used to achieve leveraged gains. By judging the rise and fall of the market, you can choose to buy long or sell short to gain profits from rising or falling currency prices. If you expect BTC to rise, you can go long BTC by buying any contract. If BTC rises, you will receive leveraged gains from the increase.

The difference between perpetual and delivery contracts

Delivery Date Restrictions

From the design mechanism point of view, the biggest difference from the delivery contract is that there is no delivery date and the contract will never expire and settle. As long as the contract is not liquidated, traders can hold it for a long time.

Price Setting Mechanism

The perpetual contract benchmarks the spot index price and is not easily liquidated by malicious "pin insertion". The delivery contract is generally the market price and will be affected by the "buy price" and "sell price" of the market price.

Maximum Leverage Settings are Different

Perpetual contracts provide a maximum leverage of 125 times, while delivery contracts provide a maximum leverage of 50 times. The former is more risky and speculative.

Perpetual Contracts have Funding Rates

Since futures contracts have a delivery date, the closer to the delivery date, the futures price will move closer to the spot price and eventually remain consistent. Perpetual contracts do not have a delivery date, so a capital fee is introduced to anchor the spot price. That is, when the price of the perpetual contract deviates from a reasonable spread from the spot price at a certain point, the capital fee will force the deviation back to a reasonable spread.




If the contract price is significantly higher than the spot price at a certain moment, the long side needs to pay the short side. If the contract price is significantly lower than the spot price at a certain moment, the short side needs to pay the long side. The greater the deviation, the higher the funding rate.