What Are Perps?:A Simple Guide to Perpetual Futures in Crypto

If you’ve spent any time on a trading platform or DEX, you’ve probably seen the word “Perps” or “Perpetuals.”
But what exactly are they — and why do so many traders use them?

Let’s break it down simply 👇

⚙️ The Basics

A perpetual contract (or perp) is a type of crypto futures trade — but with one key difference:

It never expires.

Traditional futures have an expiration date when the contract settles.
Perpetual contracts don’t. You can hold your position as long as you want — minutes or months — as long as your margin (collateral) supports it.

💰 How Perps Work

When you trade a perp, you’re not buying or selling the actual crypto asset (like BTC or ETH).
Instead, you’re trading a contract that tracks the price of that asset.

Two key parts define how perps work:

Leverage — lets you control a larger position with a smaller amount of capital.
For example, with 10× leverage, $100 of margin gives you a $1,000 position.

Funding rate — a small fee exchanged between long and short traders to keep the contract’s price close to the real spot price.

🧮 Example

Let’s say Bitcoin is trading at $50,000.
You open a long 10× BTC perp using $100 as margin.

That gives you a $1,000 position size ($100 × 10).

If BTC goes up 5%, your position gains $50 (because 5% of $1,000 = $50).

Your account equity = $150 → a +50% gain on your margin.

If BTC goes down 5%, your position loses $50 → margin drops to $50.

If BTC goes down 10%, your position loses the full $100 → you’re liquidated.

💡 In practice, liquidation usually happens slightly before the full 10% loss because of maintenance margin and small fees.

🧠 Why Traders Use Perps

Perps are the most popular instrument for active traders in crypto — here’s why:

No expiry — hold your trade as long as you want.

Go long or short — profit in both directions.

Use leverage — amplify moves (and risk).

Deep liquidity — perps dominate crypto volume across both centralized and decentralized exchanges.

⚠️ The Risk of Leverage

Leverage cuts both ways.
If you’re trading 10×, a 10% price move against you can wipe out your position.
If you’re trading 100×, just a 1% move can do the same.

Always start small, understand liquidation mechanics, and never risk more than you can afford to lose.

🎯 In Short

Perps = Futures without expiry.
Trade long or short. Use leverage. Manage your margin wisely.

Perpetual contracts are powerful, flexible, and a core part of modern crypto trading.
And on decentralized platforms like Perp100, you can trade them with low fees, self-custody, and full transparency — the way it should be.