# What Are Perpetual Futures?

**Perpetual futures contracts** (or perps) are crypto derivatives that allow traders to speculate on the price of an asset without owning it. Unlike traditional futures, they don’t have an expiration date and instead use a **funding rate** mechanism to tether their price to the spot market.

**Key Features:**

• Trade long or short with leverage

• No expiry — hold positions indefinitely

• Settle in SUI/USDC 

• Funding fees paid between traders to balance long/short positioning

### 🚀 Spot vs. Perpetual Futures at a Glance

|                   | Spot Trading                   | Perpetual Futures                                      |
| ----------------- | ------------------------------ | ------------------------------------------------------ |
| Ownership         | Direct asset ownership         | No ownership — you're trading a contract               |
| Settlement        | Immediate                      | No expiry; settled through margin/funding              |
| Leverage          | None (unless using margin)     | High leverage available (up to 100x on some platforms) |
| Volatility Impact | 1:1 with price                 | Gains/losses amplified via leverage                    |
| Liquidation Risk  | None                           | High (if margin < maintenance level)                   |
| Market Risk       | Exchange halts can isolate you | Index pricing avoids manipulation                      |