Perpetual Futures 101
How do they actually work?
The prediction market industry has been moving fast. Every couple months there seems to be a huge new thing everyone’s talking about. Last month was HIP-4,1 this month it’s “perps,” or perpetual futures.
Perps had been experimented with before in the crypto industry, but for the first time, they’re regulated in the United States by the CFTC. The first ever regulated perp, BTCPERP, was approved on May 29 and listed on KalshiEx shortly after.
A new class of financial products is now available to (almost) everyone in the United States. After diving in, I realized the mechanism is well-designed, and could potentially be a larger industry than prediction markets.
Let’s take a look.
