Cryptocurrency Perpetual Futures and Swaps

Perpetual futures (often called perpetual swaps) are the dominant crypto-derivatives instrument. They replicate the economic exposure of a futures contract without an expiry date. They replace maturity-based convergence with a funding mechanism that transfers cash flows between longs and shorts, typically every eight hours. This paper explains how perpetuals evolved from early proposals for non-maturing futures into a standardized crypto market instrument, and why key design choices changed over time. It synthesizes recent theoretical and empirical research on funding design, pricing, and arbitrage intuition, market microstructure, liquidation risk, and regulation. Finally, this study proposes a research agenda organized around funding design, constrained arbitrage, transparency, decentralized exchange design, policy, and legal classification, because recent U.S. and EU developments show that the same economic structure may be characterized as a futures contract, swap, CFD-type instrument, or other derivative depending on statutory definitions, venue design, and supervisory interpretation. This paper proposes the following definition: a cryptocurrency perpetual is an open-ended, margin-based derivative that gives synthetic long or short exposure to an underlying crypto asset and replaces expiry-based settlement with periodic funding payments that anchor the contract price to a reference spot price.