Perpetual Futures

What Are Perpetual Futures?

Perpetual futures are derivative contracts that track the price of an underlying asset through continuous settlement to the spot price. Unlike traditional futures, perpetuals provide continuous exposure to market movements through a funding rate mechanism that maintains price alignment with the underlying asset, eliminating the need for frequent contract rollovers.

Bitnomial launched the US perpetual futures industry with the first-ever CFTC-regulated perpetual futures contract, designed to replicate the economic characteristics of offshore perpetuals while operating within U.S. regulatory frameworks. Our Bitcoin perpetual futures are part of the comprehensive Bitcoin Complex®.

Key Mechanisms

Floating Basis

A floating basis permits temporary divergence between spot and futures prices, reflecting market demand for long or short exposure. This allows futures prices to track spot prices continuously, rendering expiration-based convergence unnecessary.

Funding Rate

The 8-hour funding rate drives convergence by compensating the counterparty, aligning with global market standards and ensuring fair pricing.

Interest Rate Adjustment

Interest rate adjustments account for the cost of capital embedded in spot positions, preventing market makers from providing unpriced credit and maintaining proper market incentives.

Key Features

Economic Parity with Offshore Perpetuals

• 8-Hour Funding Rate: Aligns with global trading sessions
• Floating Basis: Enables continuous price tracking
• Interest Rate Adjustment: Maintains proper capital costs
• Continuous Settlement: Perpetually settled to spot price without roll requirements
• No Monthly Fees: Eliminates ongoing maintenance costs

Liquidity Consolidation

• Unifies spot and derivative market liquidity into a single instrument
• Eliminates expiration fragmentation and contract rollovers
• Results in narrower spreads and reduced transaction costs