How Does the Concept of “Liquidation” Differ between Traditional Futures and Perpetual Futures Contracts in Crypto?

In both, liquidation is the forced closing of a position when margin falls below the maintenance level. Traditional futures have a set expiration date and are often physically or cash-settled then.

Perpetual futures, unique to crypto, have no expiration. Liquidation in perpetual futures is often a more rapid, automated process managed by the exchange's risk engine, typically involving an insurance fund to cover losses that exceed the liquidated margin.