What are perpetuals & perp DEXes?

Spot trading means owning a token. Perpetuals are something else entirely — a way to bet on a price without owning the asset, usually with leverage. They're the highest-volume product in on-chain trading, and among the highest-risk. We've placed them deliberately late.

What a perpetual is

A perpetual future ("perp") is a contract that tracks an asset's price and lets you go long (betting up) or short (betting down). Unlike traditional futures it has no expiry date — you can hold a position indefinitely, as long as you keep it funded. You never own the underlying token; you hold a contract on its price.

Leverage, in one line

Perps let you trade with leverage — controlling a position larger than your deposit. 10× leverage means $100 controls a $1,000 position. It multiplies gains and losses, which is the whole reason the next lesson is dedicated to its dangers.

The funding rate

Because a perp never expires, something has to tether its price to the real ("spot") market. That something is the funding rate: a small periodic payment exchanged directly between longs and shorts.

• When more traders are long, longs pay shorts — nudging the price back down toward spot.
• When more are short, shorts pay longs.

So holding a position carries an ongoing cost or income depending on which side is crowded — a real factor for anything held longer than a quick trade.

Where perps trade

Perp DEXes are among the most-used venues in all of DeFi:

• Hyperliquid — the runaway leader, a high-performance on-chain order book that by 2025 handled the large majority of decentralized perp volume.
• dYdX — a long-standing order-book perp venue.
• GMX — a pool-based model where liquidity providers take the other side.
• Jupiter Perps — perps on Solana, tied to its huge user base.

Compare them by volume, fees and open interest on the ranking. They differ in design — order-book vs. pool-based, oracle-priced vs. matched — but the core risk is the same, and it's the subject of the final perp lesson.