Summary
Learn what perpetual futures are on Hype, how long and short positions work, how USDC collateral backs perps, and why leverage increases risk.
Perpetual futures, often called perps, are contracts that track the price of a crypto asset without requiring you to own the asset itself. Instead of buying or selling the token directly, you open a position based on whether you think the price will rise or fall.
If the market moves in your favor, your position gains value. If the market moves against you, your position loses value. Unlike traditional futures contracts, perpetual futures do not have an expiration date. A position can remain open as long as it continues to meet margin requirements.
On Hype, perps let eligible users go long or short:
- Go long when you think the asset price will go up.
- Go short when you think the asset price will go down.
This is different from spot trading, where you generally need the token price to rise in order to profit. Perps also allow leverage, which means a smaller amount of USDC collateral can control a larger notional position. Leverage increases both potential gains and potential losses.
Every perps position on Hype is backed by USDC. Hype separates USDC into two balances:
- Token cash balance: USDC used for spot trading, deposits, and withdrawals.
- Perps cash balance: USDC dedicated to perpetual futures trading.
To trade perps, you transfer USDC from your token cash balance into your perps cash balance. That USDC becomes the collateral available for positions.
Perps carry significant risk. A small price move against a leveraged position can consume your margin and trigger liquidation. Once a position is liquidated, the margin allocated to that position is lost. Holding open positions can also create hourly funding payments that reduce or increase your perps cash balance.
Perps are not suitable for everyone. Understand leverage, margin, funding, and liquidation before committing real funds.
FAQ
What is a perpetual future?
A perpetual future is a derivative contract that tracks an asset price and has no expiration date.
Do I own the token when I trade perps?
No. A perp tracks the token price, but you do not own the underlying token.
Can I short crypto with perps?
Yes. Eligible users can short when they expect the asset price to fall.
What collateral does Hype use for perps?
Hype perps use USDC as collateral.
Related articles: Funding Your Perps Cash Balance, Leverage on Perps, Liquidation on Perps, Risks of Perps Trading.
Legal Notice
Perpetuals ("Perps") are provided by third-party protocols and are not available to U.S. Persons (citizens, residents, or anyone located in the U.S.). Do not attempt to access perps from within the United States.
For purposes of these Terms, a "U.S. Person" means: (i) any natural person resident in the United States; (ii) any citizen or permanent resident of the United States, including any such person temporarily located outside the United States; (iii) any entity organized or incorporated under the laws of the United States or any state thereof; (iv) any estate of which any executor or administrator is a U.S. Person; (v) any trust of which any trustee is a U.S. Person; (vi) any agency or branch of a non-U.S. entity located in the United States; (vii) any discretionary or non-discretionary account held by a dealer or fiduciary organized, incorporated, or (if an individual) resident in the United States; or (viii) any entity organized or incorporated outside the United States that is formed by a U.S. Person principally for the purpose of investing in unregistered securities or derivative instruments. "United States" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia.
Representations and Warranties. By accessing or using Perps functionality, you represent and warrant that: (a) you are not a U.S. Person; (b) you are not accessing Perps from within the United States; (c) you are not accessing Perps on behalf of, or for the benefit of, any U.S. Person; (d) you will not use any VPN, proxy, anonymization service, location-spoofing technology, or other mechanism to conceal your location, misrepresent your residency, or circumvent geographic or eligibility restrictions applicable to Perps; and (e) you understand that these representations are material and that Hypeshot, Inc. is relying on them in providing you access to Perps functionality.
YOU ACKNOWLEDGE THAT PERPS TRADING CARRIES SUBSTANTIAL RISK OF LOSS. YOU HEREBY RELEASE AND HOLD HARMLESS HYPESHOT, INC. AND ITS AFFILIATES, REPRESENTATIVES, AGENTS, PERSONNEL, PARTNERS, LICENSORS, SERVICE PROVIDERS, OFFICERS, DIRECTORS, EMPLOYEES, AND CONTRACTORS (COLLECTIVELY, THE "COMPANY PARTIES") FROM ANY AND ALL LOSSES, DAMAGES, OR CLAIMS ARISING FROM OR IN CONNECTION WITH YOUR USE OF PERPS FUNCTIONALITY, INCLUDING BUT NOT LIMITED TO LOSSES FROM LIQUIDATION, LEVERAGE, MARKET MOVEMENTS, PROTOCOL FAILURES, OR THIRD-PARTY ACTIONS.