Swaps and perps are both linear derivatives that provide leveraged exposure to an underlying asset and settle in USDC. There are many similarities between the two, but they differ across a number of key attributes including funding, liquidity source, trading hours, and margin.
The table below summarizes the main differences between swaps and perpetual futures:
| Swap | Perpetual Future |
Instrument Type | Linear derivative | Linear derivative |
Objective | Seeks to track the total return of an asset over time | Seeks to minimize the tracking error between the mark price and the underlying index price |
Settlement Asset | USDC | USDC |
Index Price | Used as a reference price only | Used to compute the funding rate. The funding formula encourages the mark price to follow the index price |
Leverage | Yes | Yes |
Counterparty | Traded bilaterally (OLP acts as counterparty) | Traded bilaterally (OLP acts as counterparty) |
Funding | Benchmarked to real cost of financing the underlying asset across traditional markets | Highly variable and determined by supply and demand |
Trading Hours | Initially not 24/7 (open/closed hours that mirror traditional markets). | 24/7 |
Source of Liquidity | TradFi institutions | Crypto exchanges and crypto-native liquidity |
Expiry | Perpetual | Perpetual |
Dividends & Cash Adjustments | Yes | Yes (on Omni) |
Margin | Isolated only until 24/7 trading is available | Isolated or cross margin |
Funding
With swaps, funding is a daily payment tied to the true financing costs of the underlying market. On markets that close over the weekend, the Friday funding payment may be tripled to cover Friday, Saturday, and Sunday.
With perpetual futures, funding rates are calculated from the premium between the mark price and the index price and can be highly variable and unpredictable depending on market movements.
For more information, see Funding for Swaps.
Trading Hours
Unlike perps which trade 24/7, swaps will initially have set trading hours. While a swap is closed, market orders, limit orders, trigger orders, TP/SL orders, and liquidations do not process. These actions resume when the market reopens.
For more information on trading hours for swaps, see Trading Hours & Market Closures.
Margin
Due to their fixed trading hours, swaps currently only support isolated margin. Cross margin will be enabled on a market once it transitions to 24/7 trading. Perps support both isolated and cross margin.