Perpetual Swap Infrastructure

Definition ∞ Perpetual swap infrastructure refers to the underlying systems that support the trading of perpetual futures contracts for digital assets. This encompasses the technological framework, including smart contracts and matching engines, that enables users to trade derivatives that track the price of an underlying cryptocurrency without an expiration date. These systems typically employ funding rates to keep the swap price tethered to the spot market price, offering continuous exposure to asset price movements. It provides leverage and hedging opportunities in the digital asset market, operating on both centralized and decentralized platforms.
Context ∞ The expansion of perpetual swap infrastructure is a significant driver of liquidity and trading volume in the digital asset derivatives market. Regulatory scrutiny is increasing due to the leveraged nature of these products and concerns about market manipulation and consumer protection. Future developments will focus on enhancing the decentralization of these platforms, improving capital efficiency, and integrating more robust risk management mechanisms.