Hey All,
Perpetuals (short for perpetual futures) are coming on LeoDex. But do you know what does perpetuals means in crypto trading. To be honest, I wasnt aware about perpetuals but then a simple google search and trading perpetuals on Delta Exchange made me understand what it is all about. If you trade in Futures and Options then understanding Perpetuals is no brainer. Here is table that clearly differentiates these three terminologies Perpetuals, Futures & Options
| Parameter | Perpetuals (Perps) | Futures | Options |
|---|---|---|---|
| Risk Profile | Unlimited profit and loss | Unlimited profit and loss | Loss limited to premium (for buyer), unlimited for seller |
| Settlement | Never settles automatically, funding keeps price close to spot | Settles normally at expiry | Can be exercised at expiry |
| Directional Trading | Can go long or short | Can go long or short | Buy Calls (long) / Buy Puts (short), or sell them |
| Expiry Date | No expiry, can be held indefinitely | Fixed expiry (weekly, monthly, quarterly) | Fixed expiry date |
| Common Use Cases | Short-term speculation, hedging | Hedging, arbitrage, speculation | Hedging, speculation, income strategies |
| Funding Mechanism | Periodic funding rate between longs & shorts | No funding, but may have basis spread | No funding, premium is paid upfront |
| Cost of Holding | Ongoing funding payments | No ongoing cost, just margin requirements | Premium paid once at entry |
| Leverage | Typically high (up to 100x) | High leverage possible (100x) in Delta Exchange | Leverage is indirect |
As you do a trade in futures and options one can trade in perpetuals as well, considering they function similarly but with a few unique twists as defined in above table. The main difference is that perpetuals have no expiry date, meaning you can hold your position indefinitely but then you need to ensure your position is not liquidated and you hold enough funds to topup. If your margin drops too low, the exchange will automatically liquidate your position to cover losses. Here are some of the major crypto tokens on the Delta Exchange where Perpetual trading is allowed and the best part is for BTC we have a 200x leverage.
I have some Perpetual trades open and still waiting to profit from them at the moment.What I can tell you is that these are risky trades and one should be prepared for both profit and loss. Perpetuals allow high leverage, which provides maximum gains but also increases the chances of liquidation. So you must be prepared for liquidation as well, incase you do not hold sufficient funds. Coming to the end part of this blog post - it is said that Perpetuals are not just a trillion dollar market but they are a multi-trillion dollars market in crypto, far exceeding volumes in futures and options. So you can imagine how much fees the Cex And Dex are generating here. Have a look at the following table
Perpetuals Market Size (2024)
| Market Type | 2024 Trading Volume | Notes / Context |
|---|---|---|
| Centralized Perpetuals | ~$58.5 trillion | Top 10 CEXes (Binance, OKX, Bybit, etc.) |
| Decentralized Perpetuals | ~$1.5 trillion | Top 10 DEXes (dYdX, GMX, etc.) |
| Centralized Perps (Q4) | ~$21.2 trillion | Just Q4 2024, showing strong growth |
| Decentralized Perps (Q4) | ~$492.8 billion | Q4 2024 volume for top 10 DEXes |
Lets now look at an simple example how much exchanges are making here on the trading fees.
Example: $1 Million Trade in a DAY... Trade Size: $1,000,000 Fee Rate: 0.05% (common maker/taker fee on perp DEXes) Fee Collected by DEX: 1,000,000×0.0005 = 5001,000,000 × 0.0005 = 500
$500 earned by the DEX from the trades in a day.
If Volume Scales Up - lets say to - $100M daily volume
$50,000 in daily fees → ~$1.5M per month.
Hence why having Perpetuals trades is becoming a big thing on Dex and just imagine when its LIVE on LeoDex where the price of #LEO and #LSTR is going... Go grab some #LEO and #LSTR before its too late... Cheers
Crypto Trading - What is Perpetuals? Not Trillion But Multi Trillion Dollar Market...
Have Your Say on Crypto Trading - What is Perpetuals?
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Best Regards Paras
Image Courtesy:: delta exchange,
PS:- None of the above is a FINANCIAL Advice. Please DYOR; Do your own research. I've have an interest in BlockChain & Cryptos and have been investing in many emerging projects.
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