Perpetual Markets

Perpetual futures contracts on Foundation are advanced financial derivatives that enable traders to speculate on the future price movements of crypto assets without the need for physical delivery of the asset. These contracts, distinct from traditional futures, do not have an expiration date and can be maintained indefinitely.

The price of perpetual futures contracts is closely linked to the underlying asset's spot price through a mechanism called funding rates. These rates adjust the cost of holding a position – long (betting on a price increase) or short (betting on a price decrease) – based on market dynamics. If the price of a perpetual contract exceeds the spot price, those holding long positions pay a funding fee to those in short positions. This fee acts to realign the perpetual contract's price with the spot price. In contrast, if the perpetual contract's price is below the spot price, the funding fee is paid from short to long position holders, incentivizing the price alignment in the opposite direction.

Perpetual futures are primarily utilized for speculation and hedging against market risks. They have become the most favored futures product in the crypto market due to their flexibility and utility. Foundation’s perpetual futures markets allow traders to either take long or short positions on crypto assets with leverage up to 100X, offering amplified exposure to price movements or opportunities for risk mitigation.

Beyond cryptocurrencies, Foundation's perpetual markets encompass a wide range of assets including commodities and foreign exchange, providing traders with a broad spectrum of investment opportunities.