What is a Perpetual Contract? A Comprehensive Analysis of the Differences Between Perpetual and Delivery Contracts

Perpetual Contracts (Perpetual Contract / Perpetual Futures) are currently the highest-volume derivatives in the cryptocurrency market. They allow users to go long or short on assets like BTC and ETH using margin and leverage, and have no expiration date, meaning positions can be held indefinitely.

What is a Perpetual Contract?

A perpetual contract is a futures contract with no expiration date. Users do not need to actually hold the underlying asset; they only need to deposit a certain amount of margin to trade on price movements:

• Go long on bullish expectations, profit when prices rise
• Go short on bearish expectations, profit when prices fall
• Amplify capital efficiency through leverage, while also increasing risk

Since there is no settlement date, perpetual contracts require a mechanism to keep the contract price from straying too far from the spot price; this mechanism is the funding rate.

Core Mechanisms of Perpetual Contracts

1. Funding Rate

When the contract price is higher than the spot price, the funding rate is positive, and longs pay shorts; conversely, shorts pay longs. This continuously pulls the contract price back close to the spot price.

1. Margin and Leverage

Users only need to deposit a portion of the position value as initial margin to open a position, for example, 10x leverage requires only 10% margin.

1. Mark Price and Liquidation

The platform uses the mark price (rather than the latest traded price) to calculate unrealized profit and loss and liquidations, preventing unreasonable liquidations caused by momentary price manipulation.

Differences Between Perpetual Contracts and Delivery Contracts

Comparison Item | Perpetual Contract | Delivery Contract Expiration Date | None, can be held long-term | Yes, settled weekly/quarterly Price Anchoring Method | Funding rate | Delivery settlement convergence Holding Cost | Periodically pay or receive funding | No funding, basis exists Operational Convenience | No position rollover needed | Position rollover required at expiration Primary Users | Mainly retail and short-term traders | Institutional hedging, calendar arbitrage

Simply put, perpetual contracts are closer to "leveraged spot trading" with low entry barriers and concentrated liquidity, which is why they have become the core revenue source for mainstream exchanges.

Why Platforms Are All Launching Perpetual Contracts

For exchanges, wallets, brokerages, and traffic platforms, perpetual contracts offer three main attractions:

• High trading frequency: User activity and retention are significantly higher than in spot trading
• Diversified revenue structure: Fees, funding fees, market making, and risk management yields
• Clear user demand: Two-way trading, creating trading demand in both bull and bear markets

However, self-developing a perpetual contract system requires matching engines, risk control, clearing, insurance funds, and market data modules, leading to long development cycles and high risks.

How to Quickly Launch a Perpetual Contract Business

6MM provides embedded perpetual contract APIs/SDKs and white-label exchange solutions, allowing platforms to access complete contract trading, risk control, and settlement capabilities without rebuilding the underlying architecture, while connecting to institutional liquidity. Currently, 1000+ partners have integrated, covering 50+ countries and regions.