Perpetual Swaps: What They Are, How They Work, and Why Traders Use Them

When you trade perpetual swaps, a type of derivative contract that lets you bet on crypto prices without owning the asset and without an expiry date. Also known as perps, they’re the backbone of high-volume trading on platforms like Bybit, Binance, and OKX. Unlike regular futures that expire, perpetual swaps keep going—forever—making them ideal for traders who want to hold positions open for days, weeks, or months. They’re not for casual investors. If you’re using them, you’re either trying to amplify gains with leverage or hedge against price drops in your actual crypto holdings.

Perpetual swaps work by tying their price to the real market value of the underlying asset—like Bitcoin or Ethereum—through a funding rate. This rate is paid every 8 hours between long and short traders. If longs are paying shorts, it means the market is bullish and prices are above fair value. If shorts are paying longs, the opposite is true. It’s a clever system that keeps the swap price from drifting too far from the spot price. This mechanism is why you’ll see perpetual swaps listed on crypto exchanges, online platforms where users trade digital assets, often with advanced tools like leverage and margin but rarely on traditional stock brokers. They’re built for speed, volatility, and active trading—exactly what you find in the posts below, where exchanges like Blockfinex and NovaEx are reviewed for their leverage offerings and slippage performance.

But here’s the catch: leverage is a double-edged sword. A 10x position can turn a 5% move into a 50% profit—or wipe you out in seconds. That’s why many of the reviews in this collection warn about risky platforms that lack transparency, audits, or reliable order matching. You’ll find posts about DeFi trading, trading crypto derivatives directly on decentralized protocols without a central authority on platforms like STON.fi and StellaSwap, where users trade perps with low fees but higher risk because there’s no customer support or insurance fund. Meanwhile, centralized exchanges offer more stability but often hide hidden fees or poor execution during market spikes.

Perpetual swaps aren’t just about speculation. They’re used by hedge funds to short Bitcoin without selling it, by miners to lock in prices before their hardware pays off, and by retail traders who want to go long on Ethereum without tying up their full balance. But if you’re new to this, you’re not just learning a trading tool—you’re learning how to manage risk under pressure. The posts ahead cover exactly that: how to spot a shady exchange, why zero-slippage claims might be misleading, and how funding rates can quietly eat into your profits. Whether you’re checking out NovaEx’s insurance model or avoiding Blockfinex’s unverified volume, every review here is a lesson in what to watch for when you’re trading perps.