Perpetual futures — "perps" — are the single highest-volume product in crypto trading. They're also one of the most misunderstood, because the mechanics that make them work (funding rates, mark price, liquidation engines) aren't the same as anything in traditional stock or options trading. This guide covers the whole thing: what a perp actually is, how the money moves, and how to think about choosing a venue in 2026.
What a perpetual futures contract actually is
A perpetual futures contract lets you take a leveraged long or short position on an asset's price with no expiration date — unlike a traditional futures contract, which settles on a fixed date. Because there's no settlement date to force the contract price back in line with the spot price, perps use a different mechanism entirely: the funding rate.
The funding rate, explained properly
Every perp contract has a funding rate — a periodic payment exchanged directly between traders holding long positions and traders holding short positions, not paid to the exchange. When the perp's price trades above the underlying spot price (more demand for longs), longs pay shorts. When it trades below spot (more demand for shorts), shorts pay longs. This constant back-and-forth pressure is what keeps the contract price tethered to spot over time.
Funding intervals vary by platform — commonly every 8 hours, though some platforms (Robinhood's EU perpetual futures product, for example) settle funding alongside P&L every 15 minutes. If you hold a position through a funding interval, that payment happens automatically — it's not optional, and it can meaningfully erode returns on a position held for a long time during a period of high funding.
Leverage and liquidation: the part that actually matters
Leverage lets you open a position larger than your account balance — 10x leverage means a $1,000 deposit controls a $10,000 position. The upside is proportionally larger gains on a correct call. The downside, which is the part that gets underweighted in most explainers, is that losses are proportionally larger too, and a leveraged position can be liquidated — forcibly closed by the exchange or protocol — once losses consume the margin backing it.
The higher the leverage, the smaller the adverse price move required to trigger liquidation. A 100x position can be liquidated by roughly a 1% move against it, before fees. Liquidation typically comes with an additional fee on top of the loss itself — Robinhood's EU perpetuals product, for instance, charges a 0.05% liquidation fee on the notional value liquidated. This is the single most important number to understand before opening any leveraged position: leverage doesn't just amplify your thesis, it collapses your margin for error.
CEX perps vs. DEX perps
Centralized exchange (CEX) perps — offered by Binance, Bybit, OKX, Kraken, and Coinbase Advanced — are custodial: you deposit funds to the exchange's control, and it operates the matching engine and liquidation logic. Decentralized exchange (DEX) perps run the same core mechanics through on-chain smart contracts, meaning you keep custody of funds in your own wallet and interact with the protocol directly.
The major CEX venues
| Platform | Markets | Max leverage | Fees (maker/taker) | US access |
|---|---|---|---|---|
| Kraken | 300+ | Up to 100x* | 0.020% / 0.050% | Yes (Kraken Derivatives US, NFA-regulated) |
| Binance | 300+ | Up to 125x (BTC) | 0.02% / 0.04% | No |
| Bybit | 400+ | Up to 100x (BTC) | 0.02% / 0.055% | No |
| OKX | 300+ | Up to 100x (BTC) | 0.02% / 0.05% | No |
| Coinbase Advanced | BTC, ETH | 10x / 20x (metals) | 0.02% / 0.02% | Yes (CFTC-regulated) |
| Robinhood (perpetual futures) | Crypto + select ETFs/commodities | Up to 10x | Liquidation fee 0.05% | EU only (Robinhood Europe, UAB), not yet US |
*Leverage varies by asset and account verification tier. See our full CEX perp platform comparison for more detail.
The major DEX venues
| Platform | Chain | Positioning |
|---|---|---|
| Hyperliquid | Own L1 | The broadest all-round perp DEX by usable depth and trader attention |
| dYdX | Cosmos appchain | The longest-established name in perp DEXs; a baseline for comparison |
| GMX | Arbitrum / Avalanche | A simpler, more DeFi-native leverage workflow |
| Jupiter Perps | Solana | Popular with Solana-native traders who already handle spot flow in the same ecosystem |
| Drift Protocol | Solana | A more active-trader-focused, chain-native derivatives venue |
Why Robinhood matters here in 2026
Robinhood's push into perpetual futures — currently live through Robinhood Europe, UAB under MiFID II/MiCA rules, with up to 10x leverage on most crypto contracts — is worth watching because it signals a regulated retail brokerage treating leveraged crypto derivatives as a mainstream product, not a niche one. Robinhood has also launched its own Ethereum-compatible Layer 2, Robinhood Chain, and third-party protocols like Perpetra have already built dedicated perpetual futures DEXs on top of it. Whether this expands to US users remains to be seen, and availability is subject to change — always confirm current eligibility directly with the platform.
How to actually choose a venue
Work through these in order, not by which one has the flashiest leverage number:
- Is it legal for you to use? This eliminates most of the list immediately for many traders and is worth confirming before anything else.
- Custodial or self-custody? CEX perps are simpler but require trusting the exchange with your funds. DEX perps mean you hold your own keys, with the added responsibility that implies.
- How deep is the liquidity on the pairs you actually trade? Deep liquidity on BTC doesn't help if you're trading a smaller-cap altcoin perp with thin depth on that specific venue.
- What's the platform's track record during volatility? Outages and forced deleveraging during high-volatility events matter more than baseline fee schedules.
A short glossary
Mark price: a smoothed reference price (distinct from the last traded price) used to calculate unrealized P&L and trigger liquidations, designed to resist manipulation via thin order books. Open interest: the total value of outstanding perp contracts on an asset, a proxy for how much leveraged exposure exists in the market. Funding rate: the periodic payment between longs and shorts described above. Liquidation price: the price at which your position's margin is fully consumed and the position is force-closed.
Sources: DEXTools, Kraken, Robinhood, platform fee documentation. Figures as published at time of writing and subject to change.