Lesson 05 · 5 min
The contract that does not expire
A normal future has a last day. A perpetual does not. Funding replaces the ending.
A dated future is a deal about a price on a known day. When the day arrives, the contract settles and is gone. That ending is awkward if what you wanted was simply 'exposure to the coin this week, and maybe next week too.'
Dated future
It has a last day
On the end date it settles and disappears. Useful when you truly want that date. Clumsy when you just want exposure.
Perpetual
No last day. A leash instead.
Each block is a funding tick. The crowded side pays, so the contract price is pulled back toward the coin. Coinbase US hides a far-off expiry under this same leash.
A perpetual never reaches that last day. Left alone, its price could wander away from the coin. Funding is the leash. Traders on the crowded side pay traders on the other side, a little, on a clock. Paying that toll is unpleasant, so the contract price is pulled back toward spot.
Coinbase's US product is the exception that proves the rule. To fit US futures law it is technically a long-dated future, about five years out, with funding added so it trades like a perpetual. International Coinbase perps, and the Binance, Kraken, and MEXC perps people screenshot, have no practical expiry.
In one sentence. You are trading a tracker, not taking delivery of the coin. The tracker stays honest because one side pays the other to hold it.
What is funding for?