How Do Perpetual Futures Contracts Differ from Traditional Futures Contracts in the Context of Decentralized Finance?

Perpetual futures contracts, or "perps," differ from traditional futures primarily by lacking an expiration date. This allows positions to be held indefinitely.

To keep the perp price aligned with the underlying spot price, they employ a "funding rate" mechanism ▴ periodic payments between long and short traders. Traditional futures have a fixed settlement date and typically settle via physical delivery or cash, while perps are a crypto-native derivative settled purely in cryptocurrency.