The Cartoon Guide to Perps
In this post, I’ll share what I learned: four very different (but mathematically identical) mental models for what perps are, how they work, and when they don’t.
The Cartoon Guide to Perps 03.08.2021 By Dave White [L] Listen [S] Share Link , Markdown , X , LinkedIn Zoom Illustrations by: Chelsea Myers About a month ago, I realized I didn’t understand perps. For the cost of $1, a 100x bitcoin perp (short for “perpetual swap”) behaves like $100 of bitcoin. This is a pretty neat trick, especially considering you can’t redeem the perp for bitcoin or anything else. My vague idea of how they achieved this (“funding rate,” right?) seemed lacking for an instrument that traded tens or sometimes hundreds of billions of dollars per day. I spent some time puzzling
related reading
- Perpetual Swaps 101 | What are Perpetual Swaps & Funding Ratesfirefly.exchange
- Mediumcryptohayes.medium.com
- Hyperstructuresjacob.energy
- Perps Trading (Peer-to-Pool) | FWXdocs.fwx.finance
- ren (wassie arc) (@0xren_cf) on Xx.com
- A whirlwind tour of Ethereum finance — LessWronglesswrong.com
- Power Perpetualsparadigm.xyz
- But how does bitcoin actually work?youtube.com
- Three quarks | David Phelps | Substackdavidphelps.substack.com
- The Latecomer’s Guide to Crypto - The New York Timesnytimes.com
- Trading Weekend Perp Markets - by Lihong - The Logbookfreeportlogbook.substack.com
- Pearl Whitepaperpearlresearch.ai