What Is the Difference between a Perpetual Futures Contract and a Traditional Futures Contract?

A traditional futures contract has a specific, set expiration date, after which it must be settled. A perpetual futures contract, common in crypto markets, has no expiration date.

To keep the perpetual contract's price anchored to the underlying spot price, it uses a "funding rate" mechanism. The funding rate is paid between the long and short parties, typically every eight hours, to balance the market.

Perpetual futures offer continuous trading without the need for rollovers.