While traditional contracts still face the burden of renewal costs, perpetual contracts – a type of futures contract without an expiration date – are dominating the crypto market with over 90% of total derivative trading volume, largely occurring outside U.S. borders. Now, industry giants are collectively urging the U.S. Commodity Futures Trading Commission (CFTC) to quickly establish a suitable legal framework to 'bring perpetuals home.'
What are perpetuals and why are they important?
The idea of perpetual futures was initiated in 1992 by Nobel Prize-winning economist Robert Shiller. This is a type of contract that does not expire, settling daily between buyers and sellers based on price indices. Although initially just a theory, it has now become the 'heart' of the crypto derivatives market.
According to the latest data, 93% of derivative trading in the cryptocurrency space is currently comprised of perpetual contracts. Their simplicity, accessibility, and ability to provide leverage make them the preferred tool for both institutional and individual investors.
What do crypto giants say to the CFTC?
In a response sent to #CFTC last April, companies like Coinbase, OKX, Paradigm, and Hyperliquid made several strong arguments to promote the legalization of perpetual trading in the U.S.:
Coinbase Derivatives emphasizes that perpetuals currently account for up to 90% of crypto futures trading volume, far exceeding spot trading. They believe that bringing this market under U.S. regulation will open up trillion-dollar opportunities and help domestic investors access safer, more transparent products.
Paradigm proposes the establishment of a special advisory committee on decentralized perpetuals (DeFi perpetuals) to expand the space for DeFi protocols to operate transparently and decentralized rather than being confined to traditional exchanges.
Hyperliquid Labs – the development team behind Layer-1 blockchain Hyperliquid – highlights three benefits of DeFi perpetuals:
Absolute transparency: All orders, cancellations, matches, or liquidations are publicly recorded and cannot be altered on the blockchain.
Composability: Open blockchains allow protocols to interact and rapidly build new products.
Asset management: Investors hold assets in their own wallets, reducing reliance on intermediaries and avoiding the risks of hacking or fraud.
OKX emphasizes liquidity advantages: Unlike traditional futures which are fragmented by multiple maturities, perpetuals concentrate liquidity in one place, benefiting both traders and complex strategies like arbitrage or hedging.
Is the U.S. about to open up to perpetuals?
CFTC Commissioner Summer Mersinger, who is about to step down, stated that the agency is looking to allow perpetual trading in the U.S. 'very soon.' This opens up opportunities for the U.S. not only to lead in technology but also to catch up with global financial trends, where crypto and DeFi are changing how we understand trading and investing.
Engaging with users and the crypto market
The CFTC's listening to these proposals indicates a clear shift in how regulators view crypto – no longer merely speculative assets, but rather a new financial ecosystem that is rapidly developing beyond the control of the U.S. For users on Binance and the market in general, if DeFi perpetuals are legalized and properly regulated, this could be the key to unlocking a transparent, flexible financial era that relies less on centralized intermediaries.
Risk warning
The cryptocurrency market always carries many risks, including high price volatility, technical failures, and legal risks. Derivative products like perpetual contracts are particularly highly leveraged and may not be suitable for all investors. Please consider carefully before participating.