No expiry, with a tether
A traditional future expires on a set date and converges to spot at settlement. A perpetual never expires — you can hold it indefinitely. That raises a problem: with no settlement to pull it back, what stops the contract drifting away from the real price? The answer is funding: a periodic payment between the two sides that keeps the perp anchored to spot.
How funding tethers it
When the perp trades above spot — too many crowded longs — longs pay shorts, which discourages longs and nudges the price back down toward spot. When it trades below spot, shorts pay longs. The funding rate is therefore also a crowding gauge: persistently positive funding means the long side is paying to stay in, a sign of one-sided positioning.
payment = positionNotional × fundingRate (each funding interval) The interval varies by venue — Hyperliquid settles funding hourly, while many centralized venues use an eight-hour cycle. Positive rate: longs pay shorts. Negative: shorts pay longs.
Perps are usually traded with leverage, which magnifies gains and losses alike. If the market moves against you past your posted margin, the position is liquidated — force-closed at a loss. Leverage is the reason perps can be efficient and the reason they can wipe an account; treat it with respect. This is education, not advice.
vyx scans perp microstructure across 300+ Hyperliquid perpetuals: funding extremes, open-interest surges, and the order flow underneath them. It is the live positioning picture — where the crowd is leaning and whether new money is committing or unwinding.
Further reading
Related
FAQ
How do perpetual futures work?
They are leveraged contracts with no expiry. You post margin to open a long or short, a funding payment between longs and shorts keeps the price near spot, and the position stays open until you close it or it is liquidated.
What is funding on a perpetual future?
Funding is a recurring payment exchanged between longs and shorts that anchors the perpetual to the spot price. When funding is positive the perp is above spot and longs pay shorts; when negative, shorts pay longs.
How are perpetual futures different from traditional futures?
Traditional futures expire on a set date and converge to spot at settlement. Perpetual futures never expire and rely on a funding payment, rather than settlement, to keep their price aligned with spot.
See it on the live map
Scan order-book pressure across 300+ Hyperliquid markets in real time.
Open vyx