What Is the Primary Difference between a Futures Contract and a Perpetual Swap in Crypto?

A futures contract has a specific, fixed expiration date, after which it settles and closes. A perpetual swap, however, does not have an expiration date; it can be held indefinitely.

To keep the perpetual swap's price anchored to the spot price of the underlying asset, it uses a mechanism called the "funding rate." This rate is paid periodically between long and short position holders, ensuring convergence between the derivative and spot markets.