What is the difference between futures and perpetual contracts?

Aspect

Futures Contracts in Crypto

Perpetual Contracts in Crypto

Fixed Expiration

Yes

No

Settlement

Upon expiration, in cash or underlying cryptocurrency

Through a funding rate mechanism

Timing

Traders need to consider contract rollovers and gaps

Continuous trading without rollovers

Trading Fees

May involve higher fees due to expiration and settlement

Tend to have lower fees due to no expiration

Influence

Prices influenced by market supply and demand dynamics

Prices maintained by funding rate mechanism

Traditional Markets

Common in traditional financial markets

Prevalent in cryptocurrency markets