What a perpetual future is
A perp is a contract that tracks an asset's price and lets you take a leveraged long or short position on it. The key word is perpetual: unlike a traditional futures contract it has no expiry date, so you can hold the position for as long as you keep it funded.
How the price stays honest
With no expiry to force the contract back to the real price, perps use a funding rate. Every few hours one side pays the other a small fee. When the perp trades above spot, longs pay shorts, which nudges people to sell and pulls the price back down. When it trades below spot, shorts pay longs. That steady tug keeps a perp tracking the underlying market.
Leverage cuts both ways
You post only a fraction of the position as margin, so a small move in the asset is a large move in your account. If the price runs against you and your margin can no longer cover the loss, the position is liquidated and you lose the collateral behind it. Higher leverage means a smaller move wipes you out.
Where they trade
Perps run on centralized venues like Binance and decentralized ones like GMX, dYdX, and Hyperliquid. On the decentralized platforms the position settles on-chain and you keep custody of your collateral through your own wallet, instead of depositing it with an exchange.
Why the funding rate is worth watching
Funding is also a read on sentiment. Persistently high positive funding means the market is crowded long and paying up to stay there, which often comes right before a squeeze.