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What is a perpetual?

A perpetual future (a “perp”) is a contract that tracks the price of an asset without ever expiring. Ordinary futures have a settlement date; perps removed the date. You can hold a position for an hour or a year. You don’t own the underlying asset. Buying BTC-PERP doesn’t give you Bitcoin; it gives you a position that gains when Bitcoin rises and loses when it falls. That’s why you can go short as easily as long — you’re trading exposure, not custody. There’s nothing to borrow and nothing to locate.

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Funding — what keeps the price honest

A contract with no expiry has a problem: nothing forces its price to match the real asset. The fix is the funding rate — a small periodic payment between the two sides:
  • Perp trading above spot → longs pay shorts. Being long costs you.
  • Perp trading below spot → shorts pay longs. Being short costs you.
This makes the expensive side pay to stay, pulling the perp price back toward spot. It’s a transfer between traders, not a fee the exchange takes.
Why it matters more than people expect. Funding is charged repeatedly — hourly on some venues, every eight hours on others. On a position held for days it can easily exceed everything you saved on entry price. A rate that looks trivial per interval is a large annual number: 0.01% every 8 hours is roughly 11% a year.

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Leverage and margin

Margin is the collateral backing your position. Leverage is how much position that collateral controls. With 100ofmarginat5×leverageyoucontrola100 of margin at 5× leverage you control a 500 position — a 1% market move is a 5% move on your money, in both directions. Leverage doesn’t increase your expected return; it scales everything, gains and losses alike, and brings the liquidation price closer.

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Liquidation

If the market moves against you far enough that your margin can’t cover the loss, the exchange closes your position automatically. That typically means losing most or all of the margin on that position. Approximate — the exact level depends on the venue’s maintenance margin, and fees and funding eat into your buffer over time. ryft shows your actual liquidation price per position; that number, not the table, is the one to watch.
The most common way people lose everything. At 20× leverage, an ordinary daily move in a major asset is enough to liquidate you.

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Perp DEXs vs centralised exchanges

That last row is the whole reason ryft exists.

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Before your first trade

  • Start small. Small enough that a total loss on the position is an annoyance, not a problem.
  • Use low leverage while learning. 2–3× leaves room to be wrong temporarily. 20× does not.
  • Know your liquidation price before you open, not after.
  • Account for funding on anything you hold overnight. It compounds.
  • A liquidation takes the whole position margin.
None of this is financial advice. Perpetual futures are high-risk instruments, and most people who trade them with leverage lose money.