Perpetuals

Perpetuals (perps) are the most heavily traded derivative instrument in crypto. The key difference from a standard futures contract: no expiration date — a position can be held indefinitely. The contract price is pulled toward spot through a funding-rate mechanism.

Why they exist

Perpetuals solve several problems at once:

• Shorting without borrowing. Spot shorting requires borrowing the asset. With perps you simply open a short.
• Leverage. Positions can be 5x to 50x the posted margin. That magnifies both gains and losses.
• Capital-efficient hedging. A spot holder can hedge by opening a perp short with small margin, without selling the underlying.
• Directional speculation in either direction without physically holding the asset.

How the funding rate works

The perp’s mark price is not equal to the index (spot) price. When the perp trades above spot, longs are dominant and pay shorts each funding period. When it trades below, the flow reverses.

Funding rate acts as a continuous economic incentive:

• Skew up → expensive to hold longs → longs close, new shorts open → price drifts back to spot.
• Skew down → expensive to hold shorts → symmetrical adjustment.

The period is typically 1 hour or 8 hours depending on the protocol; the rate is recomputed from positioning skew.

Margin, leverage, and liquidation

• Margin — collateral you post.
• Leverage — how many times larger your position is than the margin.
• Maintenance margin — the minimum equity ratio. If position value drops below this threshold, a liquidator closes the position at a discount.

The higher the leverage, the smaller the price move against you that wipes out the margin. At 50x leverage, a move of just a few percent costs the entire posted margin.

Implementation on TON

The leading perpetuals DEX on TON is Storm Trade. It uses oracle pricing for major assets (TON, BTC, ETH, other majors) and a vault liquidity model (the trader counterparty is a pool of depositors). See the dedicated Storm Trade entry for details.

Other significant perp protocols on TON are still scarce. Most leveraged trading on TON-related assets still happens on CEXes (Bybit, Binance, OKX); on-chain perps inside TON are only starting to compete.

Risks and realistic expectations

• Most retail leveraged traders lose money. That is an empirical fact, repeatedly confirmed by CEX statistics. Perps are powerful but demand discipline and a clear view on positioning.
• Funding is easy to underestimate. In a strongly skewed market, funding can eat 0.1% to 1% of a position per day. Over longer horizons that is a substantial cost.
• Slippage and liquidity. On smaller perp DEXes, a large order can move the mark price against itself.
• Oracle risk. In oracle-based perps, price manipulation is a theoretical attack vector.
• Smart-contract risk. Standard for any DeFi protocol.

Perpetuals are a must-know instrument for active crypto traders but a poor fit for casual users who opened a wallet just for NFTs or a mini-app.