What are perps, anyway? Everything you need to know about crypto’s hottest trading instrument
CoinDesk 2026-07-27 15:00:00
Context: Perpetual swaps, also known as "perps," have become the dominant trading instrument in the crypto market, with an estimated annual volume of $40 to 50 trillion, and are widely used by professional traders, hedge funds, and retail speculators to gain leveraged exposure to assets like bitcoin and ether. The instrument was developed by Ben Delo and launched by BitMEX in May 2015, and has since become a standard offering in the industry. Perpetual swaps allow traders to hold positions indefinitely, without the need for contract expiration or settlement.
Key Facts
- Perpetual swaps process an estimated $40 to 50 trillion in volume annually, dwarfing spot trading and making them the primary venue for price discovery in crypto.
- The funding rate mechanism, which is used to keep the perpetual swap price in line with the spot price, involves a payment exchanged between traders on opposite sides of the market every eight hours, with the rate calculated based on the deviation of the perpetual swap price from spot over the preceding eight-hour window.
- BitMEX, founded by Arthur Hayes and Ben Delo in 2014, was the first exchange to offer perpetual swaps, and spent a year experimenting with shorter contract durations before launching the perpetual swap, which eliminated the expiry date entirely.
- Perpetual swaps allow traders to control positions significantly larger than their deposited capital, with leverage of up to 100 times available on some platforms, and use automated liquidation systems to manage the risk of large losses.
- The structure of perpetual swaps, developed by Ben Delo in 2015, has proven durable enough that regulators in the U.S. are now exploring its application to traditional assets, with the CME potentially listing perpetual swaps on equities.