What is a Perpetual Contract
A perpetual contract is an "innovative" type of futures contract. Traditional contracts have an expiration and delivery date, whereas perpetual contracts have no delivery date and can be held indefinitely, hence the name Perpetual Contract. The contract settles every 8 hours, specifically at three times during the day: 00:00, 8:00, and 16:00 (UTC+8).
PerpVia V1.0 focuses on providing USD-based perpetual contracts:
USDT-based contracts (forward contracts) support perpetual contracts and are settled in USDT.
Features of USDT-Margined Contracts
Settled in assets pegged to the US dollar: contracts are quoted and settled in USDT.
Clear pricing rules: each contract specifies the delivery quantity of the underlying asset per contract, also known as the "contract unit."
Advantages of USDT-Margined Contracts
USDT-margined contracts are linear contracts quoted and settled in USDT. The biggest advantage of settlement in USDT is the ease of calculating returns in fiat currency. This makes USDT-margined contracts more intuitive. For example, 1 USDT is approximately equal to 1 USD, so after earning a profit of 500 USDT, it is easy to calculate that the profit is about 500 USD.
Additionally, using USDT as a universal settlement currency significantly enhances trading flexibility. Multiple futures contracts can use the same settlement currency (e.g., BTC, ETH, XRP, etc.), so there is no need to purchase the underlying tokens to fund contract positions. Therefore, when trading with USDT, no extra currency conversion is needed, saving unnecessary fees.
During periods of high market volatility, USDT-margined contracts can effectively reduce the risk of large price fluctuations. Therefore, there is no need to worry about the risk exposure of hedging the contract’s underlying margin.
Features of Coin-Margined Contracts
Settled in cryptocurrency: contracts are quoted and settled in the underlying cryptocurrency, eliminating the need to hold stablecoins as margin.
Coin-margined perpetual contracts are digital asset derivatives that allow users to profit from the rise or fall of digital asset prices by choosing to buy long or sell short contracts. Similar to a collateralized asset spot market, their price closely tracks the underlying reference index price, with the main price anchoring mechanism being the funding fee.
Perpetual contracts have no delivery date, allowing users to hold positions indefinitely. The contracts settle every 8 hours, and after each settlement, realized profits and losses are transferred to the user’s account balance.
Advantages of Coin-Margined Contracts
Coin-margined contracts use cryptocurrency as the settlement currency, providing an ideal option for miners or holders. Because the contracts are settled in the underlying cryptocurrency, the profits earned can be used for long-term capital accumulation.