Perpetual futures, explained • Hacker News Board

Re: Perpetual futures, explained

#61

Post by miohtama » Sat, Dec 06, 2025, 11:25 AM UTC

Maxatar wrote: post #6

mhh__ wrote: post #3

Earlier quoted context omitted.

That's not true with decentralised exchanges like hyperliquid, no?

Hyperliquid and similar exchanges aren't decentralized. That is their long term goal but they are very far from achieving it. The few actual decentralized exchanges are too slow and expensive.

There are some exchanges that are more decentralised (and older) than Hyperliquid. Hyperliquid, while being the most popular one, is not the only horse in the town.

E.g. GMX on Arbitrum chain is no longer prohibitively expensive.

Left some comments here https://news.ycombinator.com/item?id=46172450

Re: Perpetual futures, explained

#62

Post by miohtama » Sat, Dec 06, 2025, 11:30 AM UTC

wmf wrote: post #37

spir wrote: post #29

I don't think many people on HN realize how globally systemically important public blockchains are on track to become, especially Ethereum. The understandable hatred of the casino and many scams has blinded most of HN as to the true potential of the technology and its associated new public institutions. That's what a decentralized public blockchain is, a new kind of public institution. One small example of this is th…

I guess you could help educate us by giving some non-gambling and non-criminal examples of innovation powered by Ethereum that justify its importance.

I would say stablecoins.

They are so important that now every country in the world has and is making laws about them.

Re: Perpetual futures, explained

#63

Post by miohtama » Sat, Dec 06, 2025, 11:36 AM UTC

max_ wrote: post #17

Is there a good resource on how perps actually work? i.e a technical specification on how to implement them?

Yes!

If you want to get into the deepest detail there are several decentralised perpetual futures exchanges.

Here are some open source codebases on Github:

https://github.com/vegaprotocol/vega

https://github.com/dydxprotocol/v4-chain/

https://github.com/gmx-io/gmx-synthetics

https://github.com/0xOstium/smart-contracts-public/

Vega is a stalled project, but they have good documentation:

https://docs.vega.xyz/release/concepts/new-to-vega

Re: Perpetual futures, explained

#64

Post by michaelmrose » Sat, Dec 06, 2025, 2:02 PM UTC

yieldcrv wrote: post #44

michaelmrose wrote: post #39

Earlier quoted context omitted.

BTC almost exclusively enables crime. It's fundamentally too bad at basically everything to replace any part of the real economy. It is almost exclusively used for crime, admittedly fun technological exploration, and gambling on a valuation based not on actual net utility in current context but on perception of future utility that will probably never materialize. Web 2.0 based on boring old primitives like ad dollars…

BTC doesn’t really operate in the decentralized finance world, all the platforms for applications are on other chains so your arguments are also stuck in 2014 Ask an AI about it to catch up, this is a decade too late to have that conversation the only thing that matters is that there is liquidity and permissionless deployment, we are far far beyond “should there be liquidity”, you can build business on smart contract…

[dead]

Re: Perpetual futures, explained

#65

Post by tripplyons » Sat, Dec 06, 2025, 6:05 PM UTC

HWR_14 wrote: post #33

Why would I want a perp on BTC when I can just buy the coin? The example quoted the price of the perp as (close to) the same as the price of BTC, so if I'm not getting leverage why not just buy the coin and avoid counterparty risk?

It's not just the difference in price that would compensate you, it is also the funding rate.

Other than that, futures tend to be more liquid and capital efficient.

Re: Perpetual futures, explained

#66

Post by spir » Sat, Dec 06, 2025, 6:13 PM UTC

wmf wrote: post #37

spir wrote: post #29

I don't think many people on HN realize how globally systemically important public blockchains are on track to become, especially Ethereum. The understandable hatred of the casino and many scams has blinded most of HN as to the true potential of the technology and its associated new public institutions. That's what a decentralized public blockchain is, a new kind of public institution. One small example of this is th…

I guess you could help educate us by giving some non-gambling and non-criminal examples of innovation powered by Ethereum that justify its importance.

1. Stablecoins

2. Tokenizing all assets (equities, commodities, real estate, etc.)

3. Being able to use those stablecoins/tokenized assets in DeFi protocols that are more automated, more impartial, and less extractive than corresponding traditional finance systems. Including lending and marketplaces to buy/sell. Many industries will see parts of their back offices go onchain. Tokenized real estate + onchain swapping = onchain real estate markets. Stablecoins + onchain swapping = onchain forex markets.

4. All of these being inherently global, so anyone in the world with a mobile phone can access these assets and the onchain financial system.

5. All of these being size-agnostic. The same assets and technologies work with a 5 cent buy of tokenized TSLA stock just as they do with a 50 million buy.

6. All of these capabilities enjoy instant settlement. The act of trading the tokenized asset also settles the trade. There is no more T+1 settlement risk or delay. This reduces risk and improves capital efficiency.

7. Decentralized public chains, especially Ethereum, offer new kinds of credible commitments that are strong enough to bind corporations and governments because the agreements are automated by the highly decentralized chain. Centralized chains (almost all chains) can't do this because they are too easy to rewrite history if governments apply pressure. When using Ethereum, instead of relying on a counterparty to keep their word and then suing them if they don't, parts of that agreement can become automated by the chain, reducing risk of breach of contract and cost of compliance. Maximum decentralization greatly reduces overall risk, which is very valuable at global scale.

8. Generally increased permissionless innovation, stronger property rights, and freer markets. Anybody can use onchain or build onchain, there's no gatekeepers.

Re: Perpetual futures, explained

#67

Post by spir » Sat, Dec 06, 2025, 6:13 PM UTC

beeflet wrote: post #41

spir wrote: post #29

I don't think many people on HN realize how globally systemically important public blockchains are on track to become, especially Ethereum. The understandable hatred of the casino and many scams has blinded most of HN as to the true potential of the technology and its associated new public institutions. That's what a decentralized public blockchain is, a new kind of public institution. One small example of this is th…

I don't realize, care to enlighten us?

Here's a list of some transformative benefits of decentralized public chains https://news.ycombinator.com/item?id=46175312

Re: Perpetual futures, explained

#68

Post by spir » Sat, Dec 06, 2025, 6:18 PM UTC

biorach wrote: post #55

spir wrote: post #29

I don't think many people on HN realize how globally systemically important public blockchains are on track to become, especially Ethereum. The understandable hatred of the casino and many scams has blinded most of HN as to the true potential of the technology and its associated new public institutions. That's what a decentralized public blockchain is, a new kind of public institution. One small example of this is th…

> the most state-of-the-art perpetual futures market in the world is an Ethereum Layer 2 named Lighter Is this not just a state of the art innovation in the Ponzi scheme and online casino space?

It's true that perp platforms are zero-sum games mostly catering to extremely high risk traders that overwhelmingly rely on luck more than skill. I don't use perp platforms myself.

It's also true that perp platforms can provide very accessible and efficient hedging. For example, if you own NVDA and don't want exposure to their quarterly results volatility, you can take a much smaller amount of collateral than your underlying NVDA shares and use that to open a 10x leveraged short on NVDA in the same size as your main NVDA position. This makes you "delta neutral" so the USD value of your position won't change even if NVDA craters on quarterly results. All without selling your underlying shares. Then you can close the short after the quarterly results are absorbed by the market.

Separately, here is a list of transformative benefits of public decentralized chains https://news.ycombinator.com/item?id=46175312

Re: Perpetual futures, explained

#69

Post by creer » Sat, Dec 06, 2025, 8:13 PM UTC

Animats wrote: post #2

It's striking how much the crypto world depends on trust in other parties. The whole point of crypto was supposed to be that it was "trustless". But it's not set up that way. All these crypto derivatives are not set up as contracts on a blockchain, with assets locked up until the derivatives settle. They're book entries with some weakly regulated exchange in Outer Nowhere.

> The whole point of crypto

There is a common confusion in this (perhaps?). Most businesses get created primarily to make money. Not primarily to solve the world's problems. It's easy to say "if they really had their customers at heart...". Well, yeah, but that's not and has never been the priority. It's not a cynical view, it's being realistic.

All kinds of mayhem follows. All the way to fundamental research papers such as "on average actively managed mutual funds do not beat XX index". Well, yeah, mutual funds don't get created because someone is good at it. They get created because someone wants to make money. Beating XX is not the first objective, or competence, of the entrepreneurs. Hopefully that fund doesn't last too long but often it does, and anyway there are many of them.

So anyway, there are plenty of ways to try and leverage ideas of cryptography, crytocurrencies, block chain - most of which are still accessible - and most of the ventures in the field are not going to be primarily about solving the users' problems.

Re: Perpetual futures, explained

#70

Post by trhway » Sat, Dec 06, 2025, 9:28 PM UTC

>In cases where management deems paying winners from the insurance fund would be too costly and/or impossible, they automatically deleverage some winners.

that's deep, in all senses.