What Is a Perpetual Swap and Why Is It Popular in Crypto Trading?
A perpetual swap is a derivative contract similar to a futures contract but with no expiration date. This allows traders to hold leveraged positions indefinitely, which is highly attractive for speculation.
A funding rate mechanism is used to keep the swap price anchored to the underlying spot price, which is paid between long and short traders. Its simplicity and leverage make it a favorite for the active crypto user base.