What are perpetuals (perps)?

A perpetual contract, often called a perp, is a derivative that tracks the price of an asset without an expiry date. Instead of buying the underlying coin, stock, index, or commodity, you trade a contract whose value moves with that market.

Perps are commonly traded with leverage. Leverage lets a position control more notional value than the margin posted, so a small market move can create a larger gain or loss relative to the margin. It does not make the trade safer or create an edge.

Because a perp does not expire, platforms use a funding rate to help keep its price close to the underlying market. Depending on the market and the rate, longs may pay shorts, or shorts may pay longs. Funding, trading fees, spread, and slippage all affect the result.

A position can be liquidated when losses use too much of its margin. In a prop-firm evaluation, the firm’s daily-loss limit and maximum drawdown can be reached before a platform liquidation occurs. Treat both as separate risk boundaries.

Many crypto prop firms are built around on-chain perpetual markets. The account shown to you may still be simulated, even when the market data or settlement rails are on-chain. Before paying, check what is simulated, what is live, which markets are allowed, and how rewards are calculated.