What are perps in crypto? Perpetual futures explained

What are perps in crypto? Perps, short for perpetual futures, are futures contracts with no expiry date: you go long or short on a token’s price by posting collateral, usually with leverage, and the position stays open until you close it or it is liquidated. You never hold the token itself. Cherry (cherry.fun) is a wallet-to-wallet messenger and community app for crypto, and its users reach perps via the Trading Terminal mini app inside Cherry chats.

How perps work in crypto

A dated future settles on a fixed day. A perp never does, so it needs other machinery to stay tied to the price it tracks. Four pieces do the work.

• Collateral and leverage. You post collateral and open a position larger than it. A 5x long on 100 USDC of collateral moves like 500 USDC of the token, in both directions.
• Mark price. The venue’s fair price for the contract, built from index prices and its own order book, so one stray trade does not move it. Unrealized P&L and liquidation are measured against it.
• Funding. A periodic payment between longs and shorts that pulls the contract toward the underlying. When the rate is positive, longs pay shorts; when it is negative, shorts pay longs. Hyperliquid, for one, pays it every hour.
• Liquidation price. If the mark moves against you far enough that your collateral falls below the maintenance margin, the venue closes the position. Take profit and stop loss are orders you set in advance to close it yourself at a price you chose.

Perps are margin products, and a liquidated position loses the collateral behind it.

Stock perps versus tokenized stocks

A stock perp is a perpetual contract on a share price. It gives you long or short exposure, with funding and a liquidation price, and you own no share and no token backed by one. A tokenized stock is the reverse: a token an issuer backs with a share it holds in custody, bought and sold like any other token, with no funding and no liquidation.

Hyperliquid’s HIP-3 upgrade went live on 13 October 2025 and lets anyone who stakes 500,000 HYPE deploy a perp market, and builders have used it for stocks, gold and indices. HIP-3 is Hyperliquid’s system, not a Cherry venue. For the token side of the split, see real-world assets on Cherry .

Example on Cherry

The Trading Terminal’s Perpetuals list shows each market with its mark and an hourly funding column. Open a market and the ticket asks for a side, “Long” or “Short”, an amount, and “Leverage”. Before you sign, it shows “Collateral required”, “Mark price”, “Estimated fee” and “Slippage”, with optional “Take profit” and “Stop loss” fields. Once the order is in, the position lists “Entry”, “Mark”, “Liq” and “Size”.

Read the “Mark price” row with care. The Terminal shows the underlying token’s spot price there as a reference, in place of a live mark quote from the market, and a dash when no spot price matches. It tells you where the token trades; the price your order fills at, and the one liquidation is measured against, can differ. Every order is a transaction you sign in your wallet.

Retail crypto derivatives are banned or restricted in some countries. The UK’s Financial Conduct Authority has banned their sale to retail consumers since 6 January 2021, and when it announced in June 2025 that it would reopen crypto ETNs to retail, it said the derivatives ban would remain in place. Check the rules where you live. Nothing here is financial advice. Tokens can lose value.

Open the Trading Terminal at chat.cherry.fun/@trade to see a perp ticket for yourself.

Related terms

• Trading in chat : token cards and swaps inside a Cherry conversation.
• Tokenized stock : a token backed by a held share.
• Prediction market : contracts on an event’s outcome rather than a price.
• Real-world assets : stocks and other off-chain assets as Solana tokens.

FAQ

What is the funding rate in perps?

It is the periodic payment between longs and shorts that keeps a perpetual contract’s price close to the market it tracks. When the rate is positive, longs pay shorts; when it is negative, shorts pay longs. Each venue sets its own schedule, and Hyperliquid, for example, pays funding every hour.

Sources

• Hyperliquid docs: funding
• Hyperliquid docs: liquidations
• Hyperliquid docs: HIP-3 builder-deployed perpetuals
• Cointelegraph: Hyperliquid now allows builders to deploy perpetual futures contracts (13 October 2025)
• Nansen: What is HIP-3?
• FCA: ban on the sale of crypto derivatives to retail consumers
• FCA: lifting the ban on crypto ETNs, with the derivatives ban kept
• Trading Terminal on Cherry