What is a perpetual future? Perps explained simply
A perp is a futures contract with no end date. How funding keeps it near spot, what margin means, and how close Bitcoin's perp stayed to spot each year.
A perpetual future, or perp, is a futures contract that never expires. A small payment called funding, made between longs (who gain when price rises) and shorts (who gain when it falls), is built to keep the perp's price near the spot price. In our test, the middle gap between the Binance Bitcoin perp and Coinbase spot stayed within about 6 basis points of zero in every year from 2019 to 2026. A basis point is one hundredth of one percent.
These are past cases, not a forecast.
For who pays funding and what it costs to hold a perp, see What is a funding rate?.
What is a perpetual future?
Start with the ordinary kind. A futures contract is a deal to trade something at a set price on a set date. It has an end date. When that date arrives, the contract closes.
A perp has no end date. You can keep it open as long as your account can pay for it.
With a perp you do not own any coin. You hold a contract that gains or loses as the coin's price moves. The spot price is the price for buying the actual coin right now.
A long position gains when the price rises. A short position gains when the price falls.
| Spot | Regular future | Perp | |
|---|---|---|---|
| Do you own the coin? | Yes | No | No |
| Is there an end date? | No | Yes | No |
| Is there funding? | No | No | Yes |
| Can the exchange close it for you? | Not if you pay in full | Yes | Yes |
Why does a perp stay close to the spot price?
A perp has no end date, so nothing forces its price to meet the spot price on a set day. Exchanges use funding instead. Funding is a small payment between traders on opposite sides of a perp.
- When funding is positive, longs pay shorts.
- When funding is negative, shorts pay longs.
Here is the idea. If the perp trades above spot, funding is set to be positive. Holding a long then costs money, and holding a short earns money. That gives traders a reason to sell the perp, which pulls its price back toward spot. The reverse happens when the perp trades below spot.
Hyperliquid pays funding every hour. Each exchange sets its own schedule and formula.
How close did a perp stay to spot?
We compared two Bitcoin markets. Coinbase BTC-USD is spot, priced in US dollars. Binance BTCUSDT is a perp, priced in USDT, a token meant to track the dollar. We matched their hourly closing prices at the same UTC time. UTC is the shared world clock.
A positive gap means Coinbase was higher.
| Period | Matched hourly closes | Middle gap (bps) | 5% of hours below | 5% of hours above |
|---|---|---|---|---|
| All years | 62,342 | 3.26 | −12.36 | 15.05 |
| 2019 (from Sept) | 2,741 | 5.90 | −20.39 | 29.77 |
| 2020 | 8,781 | 2.83 | −22.82 | 25.14 |
| 2021 | 8,760 | 1.42 | −15.09 | 15.35 |
| 2022 | 8,760 | 4.99 | −9.51 | 11.82 |
| 2023 | 8,757 | 4.39 | −7.79 | 15.67 |
| 2024 | 8,784 | 0.70 | −12.46 | 10.07 |
| 2025 | 8,755 | 5.33 | −3.95 | 11.13 |
| 2026 (to Oct 19) | 7,004 | −1.01 | −11.07 | 8.29 |
The middle gap stayed within about 6 basis points of zero in every year. It was positive in seven of the eight years and slightly negative in 2026. The widest hours were in 2019 and 2020.
The gap is not a clean measure of "perp minus spot". It mixes two exchanges, two currencies (US dollars and USDT) and a spot market with a perp. It is not a profit chance either. It leaves out buy and sell spreads, fees, funding and the limits on moving money between exchanges.
For more on why one coin has different prices, see why Bitcoin's price differs between exchanges.
How big is funding in practice?
On Hyperliquid, funding is recorded every hour. From April 2025 through September 2026, each coin below had 13,152 hourly records, with no missing hours.
The median is the middle rate after sorting all hours from lowest to highest. The p95 is the rate that 95% of hours were at or below. The last column stretches the average hourly rate over a year.
| Hyperliquid coin | Hours negative | Median (bp per hour) | p95 (bp per hour) | Average, yearly scale |
|---|---|---|---|---|
| BTC | 15.37% | 1/8 | 0.16 | 7.93% |
| ETH | 16.99% | 1/8 | 0.18 | 7.47% |
| SOL | 30.47% | 0.11 | 0.14 | 2.92% |
| HYPE | 7.76% | 1/8 | 0.52 | 13.34% |
A rate of 1/8 of a basis point per hour is the same as 1 basis point every 8 hours. If every hour paid that rate, a long would pay 3 basis points a day, or 0.03% of the position. That is 30 cents a day on a $1,000 position. A positive average means longs paid shorts overall.
Funding is small in a typical hour, and it flips sign. SOL funding was negative in 30.47% of hours, so shorts paid longs in nearly a third of them.
The yearly-scale figure is not a return. It stretches an observed average over a year, and it ignores price changes, fees and the changes in your position. Our guide to Hyperliquid funding rate history shows how much funding changed from month to month.
What are margin and liquidation?
Perp traders post margin, which is your own money set aside as a guarantee. With leverage, you can open a position bigger than your margin. For example, $10 of margin at 10 times leverage opens a $100 position.
If the price moves against you by about a tenth, a $10 loss uses up the $10. The exchange then closes the trade for you. This is a liquidation. In real life it happens a little sooner, because exchanges require a minimum cushion called maintenance margin.
Open interest is the total size of perp trades still open. Our guide to how liquidation works in crypto has measured odds of Bitcoin moving against a position within a day.
What does this data not show?
- We did not test whether funding is the reason the Bitcoin gap was small. We only measured the gap and, separately, funding.
- The gap comes from Coinbase and Binance. The funding numbers come from Hyperliquid. Do not mix the two.
- Nothing here says whether a perp or spot trade would have made money.
How we measured this
For the gap, we used Coinbase BTC-USD spot and Binance BTCUSDT perp hourly closes, matched on the same UTC close time. That gave 62,342 pairs from September 2019 to October 2026. The gap is 10,000 × (Coinbase close ÷ Binance close − 1). Missing hours stay missing.
For funding, we used Hyperliquid's recorded hourly funding from April 1, 2025 to September 30, 2026, grouped by the UTC hour of the actual timestamp. Yearly-scale figures are the average hourly rate times 8,760 hours. They are simple, not compounded. Coins were picked by how complete their data was, not by size.
Try this in Comparand
Connect Comparand to your AI app, then ask:
- "List the Bitcoin markets on Binance, and show which are spot and which are perps." The market list tool (venue_markets) returns the markets one venue lists, and you can filter by kind. It is free on every key.
- "Show the funding settlements for a Binance Bitcoin perp over last month." The funding tool (venue_funding) returns funding settlements for one perp, up to 400 days per call. It is free. Ask your agent to check the coverage tool first, since that tells you which datasets each venue has.
- "Show how Hyperliquid Bitcoin open interest changed each hour yesterday." The open interest tool (hl_oi) returns the change in open interest in each bar: dollars opened, dollars closed and the net. It does not return the open-interest level. It costs $0.005 per call on pay as you go, and plans include unlimited data tools under fair-use limits.
You can try 3 coins free, read the docs, or see pricing.
The short version
- A perp is a futures contract with no end date. You hold a contract, not the coin.
- Funding is a payment between longs and shorts that nudges the perp price toward spot.
- Binance's Bitcoin perp and Coinbase's spot price had a middle gap of 3.26 basis points (0.03%) over 62,342 hourly closes.
- Hyperliquid Bitcoin funding was negative in 15.37% of hours, and SOL funding in 30.47%, so the direction of payment changes.
- If losses use up your margin, the exchange closes the trade. These are past cases, not a forecast.
Questions people ask
What is a perpetual future in simple words?
A perpetual future, or perp, is a futures contract that never expires. Unlike spot, you do not own the coin, and unlike a regular future, there is no end date. You hold a contract that gains or loses as the price moves, and you can keep it open as long as your margin covers the losses.
How close does a perp stay to the spot price?
In our test, Binance's Bitcoin perp and Coinbase's Bitcoin spot price had a middle gap of 3.26 basis points (0.03%) across 62,342 matched hourly closes from September 2019 to October 2026. In 5% of hours the gap was below −12.36 basis points, and in 5% it was above 15.05.
What is funding on a perp?
Funding is a small payment between traders on opposite sides of a perp. When funding is positive, longs pay shorts. When it is negative, shorts pay longs. It exists to nudge the perp price toward the spot price.
How often is Hyperliquid funding negative for Bitcoin?
From April 2025 through September 2026, Bitcoin funding on Hyperliquid was negative in 15.37% of 13,152 hourly records. The middle rate was 1/8 of a basis point per hour, paid by longs to shorts.
What happens if a perp trade goes against you?
If the loss grows until your margin can no longer cover it, the exchange closes the trade for you. This is called liquidation. Real liquidation prices depend on each exchange's rules, so check yours before you trade.