How Does the Lack of an Expiration Date Affect the ‘Basis’ of a Perpetual Future?

The lack of an expiration date means the perpetual future does not have the natural convergence to the spot price that traditional futures do. Instead, the funding rate mechanism is the sole force keeping the basis near zero.

The funding rate continuously adjusts the contract price by penalizing the side that is driving the price away from the spot, effectively replacing the convergence function of an expiration date.