Glossary
Perpetual Swap
A futures contract with no expiry that tracks spot price through funding and margin.
A perpetual swap tracks the price of an underlying asset and has no settlement date. Because nothing forces it to converge on spot at an expiry, it needs a payment mechanism between longs and shorts, which is the funding rate.
It is the most traded derivatives product in crypto, and it is the easiest way to lose money quickly. Margin is small, funding is charged continuously, and positions are liquidatable.
Use one when you have a specific view on direction and can set a loss limit in advance. Holding a swap in the hope of a longer-term gain means paying funding and risking liquidation along the way.
Related terms
Airdrop
Free tokens distributed to wallet addresses, usually to reward early users of a protocol.
AMM
Automated Market Maker — a protocol that prices assets with a formula instead of an order book.
APR vs APY
APR is the yearly rate without compounding; APY includes compounding and is always higher.
ATH
All-Time High — the highest price an asset has ever traded at.
Bear Market
A prolonged decline, conventionally 20% or more from recent highs.
Bull Market
A prolonged rise driven by new demand, easy credit and rising confidence.