Explain the Difference between a Perpetual Swap and a Traditional Futures Contract in a DeFi Context

A traditional futures contract has a fixed expiration date, meaning the obligation to buy or sell the underlying asset must be settled by that date. A perpetual swap (or perpetual future) has no expiration date, allowing the position to be held indefinitely.

To keep the perpetual swap price tethered to the spot price, a mechanism called the "funding rate" is used, where holders of one side of the contract periodically pay the other side.