What Is the Difference between the Mark Price and the Index Price in a Perpetual Swap?

The index price is the average spot price of the underlying asset calculated from multiple reputable exchanges, serving as the true market price. The mark price is the price used by the derivatives exchange to calculate a trader's unrealized profit and loss and to trigger liquidations.

It is typically a smoothed price based on the index price and the contract's moving average price to prevent manipulation.