A perpetual DEX lets traders open long or short derivative positions through a blockchain-based protocol. The contracts have no scheduled expiry and provide price exposure rather than ownership of the referenced asset. Collateral supports the positions, while protocol rules govern settlement and liquidation.
Trading and funding
A trader supplies eligible collateral and chooses a position size. Leverage increases exposure relative to margin, amplifying both gains and losses on that margin. Funding mechanisms commonly charge one side and credit the other to help align perpetual prices with a reference market; rates and payment arrangements vary.
Some systems match orders in an order book, while others trade against liquidity pools. Matching can occur offchain even when settlement occurs onchain. Oracle or index prices may inform margin calculations and liquidation, and can differ from the latest trade price.
Decentralization has several dimensions
Wallet access does not mean collateral remains freely withdrawable while supporting open positions. Insufficient margin can trigger forced position reductions or closure.
Trading fees, funding, slippage and network costs affect results. Contract vulnerabilities, unreliable price feeds, operator outages and upgrade powers create additional risks. A venue's custody, order processing and governance arrangements determine how much control actually rests with users.