Perpetual Futures
A perpetual future is a futures contract with no expiry that stays close to the spot price through regular funding payments.
Also known as: perps, perpetual swap
Perpetuals are the most traded crypto derivative. Because they never expire, something has to keep their price near the spot price: every few hours, longs pay shorts or shorts pay longs a small amount called the funding rate.
When most traders are long and the perpetual trades above spot, funding is positive and longs pay. Persistently high funding shows crowded positioning and is one of the few sentiment readings that comes straight from the market.