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Table of Contents
Core features
Operation mechanism
Advantages
risk
Home web3.0 What is Ethereum contract perpetual

What is Ethereum contract perpetual

Jul 15, 2025 pm 08:57 PM
oracle Blockchain ai binance cryptocurrency Ethereum btc Binance exchange metamask Huobi Ouyi trade flat

Ethereum Contract Perpetual is a decentralized financial derivative based on Ethereum that allows users to conduct leveraged long and short trading without expiration date. Its core features include: 1. No expiration date, indefinite position can be held; 2. The capital rate mechanism ensures that prices are anchored to the spot market; 3. Based on DEX operation, assets are controlled by users; 4. Supports high leverage trading; 5. No custody is required to reduce centralized risks. In operation, it relies on oracles to obtain prices, adopts an over-collateralization mechanism to prevent defaults, and supports mainstream cryptocurrency trading pairs. The advantages are transparency, censorship resistance and asset self-custody, but there are risks such as smart contract vulnerabilities, liquidation risks and Gas fee fluctuations.

What is Ethereum contract perpetual - php Chinese

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Perpetual Contracts on Ethereum is a decentralized finance (DeFi) derivative based on the Ethereum blockchain, allowing traders to leverage long and short trading without actually holding the underlying assets. This type of contract is similar to the perpetual contract provided by centralized exchanges (such as Binance and Bybit), but it runs completely on smart contracts and is automatically executed by the code without relying on intermediaries from traditional exchanges.

Core features

  1. Unlike traditional futures, there is no settlement date for perpetual contracts, and they can hold positions indefinitely, as long as the margin requirements are maintained.

  2. The funding rate mechanism regularly adjusts the capital flows between long and short parties through funding rate, so that the contract price is anchored to the spot market price and avoids significant deviations.

  3. Decentralized Transactions (DEX)
    Smart contracts based on Ethereum (such as dYdX, GMX, Perpetual Protocol, etc.) run, users interact directly through money storage (such as MetaMask), and assets are always controlled by themselves.

  4. Leveraged trading supports high leverage (such as 10x-100x), which amplifies returns and increases risks, and attention should be paid to liquidation risks.

  5. There is no need to custodial transactions to be conducted on-chain, no need to deposit assets into centralized exchanges, reducing the risk of running away or hacking attacks.

Operation mechanism

  • Price source: Relying on oracles (Oracle) (such as Chainlink) to obtain external market prices to ensure fair data.

  • Margin and liquidation: Use an over-mortgage mechanism. If the margin is below the maintenance level, the smart contract will automatically close the position.

  • Trading pairs: mainstream such as ETH/USDC, BTC/USD, some platforms support altcoin contracts.

Advantages

? Transparency: All transactions and settlement records are on the blockchain and can be publicly verified.
? Response to censorship: No KYC is required, and users around the world can participate.
? Asset Self-custodial: The private key is self-held, avoiding the risks of centralized exchanges.

risk

Smart contract vulnerabilities: Code flaws can lead to loss of funds (such as hacking).
High fluctuations and clearing: Leveraged trading is easily forced to close positions during severe fluctuations.
Gas Fees: Transaction costs may surge when Ethereum network is congested.

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