Perpetual futures
Longs, shorts, leverage, funding and liquidation price, plus the difference between pool perps and order-book perps on Solana.
A perpetual future, or perp, is a contract that tracks an asset's price with no expiry date. You can go long (profit if price rises) or short (profit if it falls) using leverage: control a large position with a small deposit called margin.
Perps are the highest-volume product in crypto and some of the riskiest for newcomers. Solana's perp DEXs did over $65 billion in a single month in late 2025.
Leverage and liquidation
With $500 of margin at 5x, you control a $2,500 position. A 10% move in your favor makes $250 (50% on your margin). A 10% move against costs the same.
The venue closes your position before your margin runs out completely. That's liquidation. Approximate liquidation price for an isolated position:
- Long: entry × (1 − 1/leverage + maintenance margin)
- Short: entry × (1 + 1/leverage − maintenance margin)
| Leverage | Move that liquidates (approx.) |
|---|---|
| 2x | ~49% |
| 5x | ~19% |
| 10x | ~9% |
| 50x | ~1% |
Funding and borrow fees
Perps stay close to the spot price through funding: periodic payments between longs and shorts. When the perp trades above spot (too many longs), longs pay shorts, and vice versa.
Pool-based venues like Jupiter instead charge an hourly borrow fee on your position size. Either way, holding costs money every hour, which adds up over days.
Two designs on Solana
Pool perps. On Jupiter Perps, traders trade against the JLP pool at oracle prices, up to 250x on SOL, ETH and wBTC. Fees are 0.06% to open and close plus borrow fees. JLP holders earn those fees and take the other side of traders' PnL.
Order-book perps. Buyers and sellers are matched by price.
PhoenixFully onchain perps from Ellipsis Labs
PacificaHigh-speed perps with weekly points
BULKOrder book built into the validators
Jupiter PerpsPool-based perps on SOL, ETH and BTC
- Phoenix (Ellipsis Labs) is fully onchain with ~0.035% fees, 65+ markets including stocks and commodities, and powers Solflare's perps.
- Pacifica matches off-chain for speed and settles on Solana, with 50x and weekly points.
- BULK builds its order book into validators for millisecond matching; invite-only since September 2026.
- Velocity is the relaunched Drift after its April 2026 exploit.
Habits that keep you solvent
- Use 2 to 5x, not 50x. Leverage is a sizing tool, not a yield.
- Set a stop loss before you enter, well before liquidation.
- Risk a fixed small percent of your capital per trade.
- Check funding before holding for days.
- Never add margin to a losing trade just to avoid liquidation.
Key takeaways
- Perps let you go long or short with leverage and no expiry.
- Liquidation price is roughly entry × (1 − 1/leverage) for longs; at 10x a 10% move wipes you out.
- Funding and borrow fees are paid every hour you hold.
- Pool perps (Jupiter) trade against LPs; order-book perps (Phoenix, Pacifica, BULK) match traders.
Check yourself
3 questions. Get them all right to mark this lesson complete.
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Facts checked Oct 19, 2026. Educational content, not financial advice.
