How Do Options on Perpetual Futures Differ from Standard Crypto Options?

Standard crypto options settle against the spot price of the underlying asset. Options on perpetual futures (perps) settle against the price of the perpetual futures contract.

Since the perpetual futures price is constantly tethered to the spot price via the funding rate, the difference is often minimal. However, the use of perps as the underlying can introduce funding rate volatility into the options pricing model.