Define a ‘Perpetual Swap’ in Cryptocurrency Derivatives

A perpetual swap is a type of futures contract that, unlike a traditional futures contract, does not have an expiration date. This allows traders to hold leveraged positions indefinitely.

To keep the perpetual swap price anchored to the spot price of the underlying asset, a mechanism called the 'funding rate' is used. This rate is paid periodically between the long and short position holders.

It is a highly popular instrument for leveraged crypto trading.