Understanding perpetual futures

Complex Systems with Patrick McKenzie (patio11) · Dec 11, 2025 · 24m

In this episode, Patrick McKenzie (patio11) walks through how perpetual futures work, from funding rates to liquidations to the surprise of automatic deleveraging. Perps are the dominant trading mechanism in crypto (6-8X larger than spot volume) and exist primarily to let exchanges and market makers run casinos more capital-efficiently. He explains why this intellectually interesting innovation probably won't escape crypto, despite what crypto enthusiasts might expect.

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Full transcript available here: www.complexsystemspodcast.com/understanding-perpetual-futures/

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