- What are perpetual contracts (perpetual agreements)?

As the article clearly explains, a perpetual contract is a type of financial derivative that does not have a fixed expiration date. Unlike traditional futures contracts, which are designed for markets that close at night and on weekends, perpetual contracts allow market participants to maintain continuous exposure to the underlying asset's price without the need to "renew" contracts periodically.

To keep the contract price aligned with the spot price of the underlying asset, the two parties periodically exchange an amount known as the funding rate. This feature, along with the ability to trade with high leverage, has made perpetual contracts a fundamental tool for risk management and price discovery in global cryptocurrency markets.

The idea of a perpetual contract is not new. The article itself mentions that its first theoretical foundation was laid in 1992 by Nobel Prize-winning economist Robert Shiller.
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