What is the difference between perpetual contracts and delivery contracts?

Perpetual contracts and delivery contracts are both contract products settled in digital assets, but they differ in expiration dates and funding mechanisms.

Perpetual Contract

Perpetual contracts do not have an expiration date. Investors can obtain profits from the fluctuations in digital asset prices by buying long or selling short. As long as the contract does not explode, it can theoretically be held indefinitely. In order to maintain the consistency between the contract price and the spot price, the perpetual contract adopts a "funding fee mechanism". In addition, the perpetual contract is benchmarked against the spot price, and the mark price is used to calculate the user's unrealized profit and loss, effectively reducing the risk of frequent explosions caused by market fluctuations.

Delivery Contract

Delivery contracts have fixed delivery periods, including weekly, biweekly, quarterly and biquarterly contracts. Investors can also earn profits by buying long or selling short. When each delivery contract expires, it is settled based on the arithmetic average of the BTC (or other currencies) US dollar index in the last hour. After expiration, all open contracts will be closed at this price.

the difference

Expiration date : Perpetual contracts have no expiration date and can be held indefinitely, while delivery contracts have a fixed delivery period.

Funding : Perpetual contracts use a funding mechanism to anchor the spot price, while delivery contracts do not require this mechanism.

Price setting : Perpetual contracts use the mark price to calculate unrealized profits and losses, which helps reduce the risk of liquidation caused by market fluctuations; delivery contracts are settled according to the arithmetic mean at maturity.