Why is it difficult for TradFi to replicate Perptual Futures? The native innovation of the encryption world is igniting Wall Street's interest.

Perptual Futures are the most representative derivation in the crypto market, not only shaping the trading habits of retail investors but also challenging the established rules of "leverage" and "expiration" in TradFi. On the surface, they appear to be futures without an expiration date, but the underlying funding rate mechanism, real-time Settlement, and programmatic management are significant innovations that Wall Street finds difficult to replicate yet is very interested in.

Perptual Futures: Unlimited trading products subvert retail investors' imagination

Trader Gwart recently posted, imagining how much of a sensation perpetual futures would cause if they were to enter the traditional financial market:

When Robinhood starts considering opening Perpetual Futures trading to retail investors (Perpetual Contract, perps), it will be as shocking as showing the Amazon tribe a mobile phone to watch adult films.

This sentence reveals the core fact: "For American retail investors accustomed to 0DTE ( 10-day options ), perpetual futures are not just another tool, but a complete shift in trading logic."

Andy, an investor at Rollup Ventures, stated that even investment banking elites with an annual salary of 500,000 USD might be surprised by the "funding rate that settles every 8 hours with no expiration date and leverage up to 100 times." This knowledge gap highlights the technological, institutional, and cognitive divide between the crypto world and TradFi.

( Breakdown of Robinhood's crypto blueprint: exchange, stablecoin, in-house multi-chain products, and RWA all in one )

Funding rate mechanism: a clever design that allows the market to self-adjust

The most critical innovation of Perptual Futures is that it replaces the Settlement date with the funding rate (Funding Rate). This mechanism is designed as follows:

When the contract price is higher than the spot price, the long position must pay the short position.

When the contract price is lower than the spot price, the short position must pay the long position.

Automatic settlement occurs every 8 hours.

This design of "market self-correction" allows prices to approach spot without an expiration date, representing a true breakthrough in encryption native. In TradFi, futures settlement relies on daily quotes and centralized settlement institutions, which cannot achieve similar high-frequency funding rebalancing.

In other words, in the crypto market, as long as the direction is judged correctly, traders can hold positions for the long term without worrying about contract expiration or rollover costs (rollover).

(Coinbase is about to launch Perptual Futures trading in the United States, emphasizing compliance with CFTC standards)

TradFi can actually do it too: technology is not the problem, definitions and systems are.

The design logic of perpetual futures is actually very common: whether it is stocks, gold, foreign exchange, or indices, as long as there are available price indices and trading liquidity, similar "close to spot" effects can be achieved through the funding rate mechanism. At the same time, TradFi has long had mature derivations including Contracts for Difference (CFD), futures, options, etc., and the technical difficulty is basically not high.

But the problem lies in the existing regulatory framework and institutional level:

Regulatory bodies find it difficult to classify: Perptual Futures are harder to fit into existing legal frameworks such as futures or options.

Lack of 24-hour liquidity: The exchange does not support 24-hour trading, and the funding rate cannot be executed stably.

High difficulty in risk management: Individual stocks are easily manipulated.

Therefore, Perptual Futures are not a technical issue, but rather a matter of institutional choice and market design. The crypto market inherently possesses the conditions of "always-on and low barriers to entry," allowing this mechanism to operate natively; whereas for TradFi to replicate it, in addition to technology, it also needs to reshape regulation and market structure, which involves higher costs and significant obstacles.

( Encryption options dominator! Coinbase announces acquisition of Deribit, creating the most complete crypto derivation trading platform in the world )

When Perptual Futures meet thirsty retail investors, who will ignite the frenzy first?

ETFs and stablecoins may be legitimate channels for TradFi capital to enter the crypto market, but what could truly ignite market enthusiasm are the perpetual futures that have long existed on the chain. As long as the technology permits and regulations are relaxed, it may attract millions of retail investors interested in "high leverage and no expiration" to flood into trading, initiating a new wave of crypto finance frenzy.

Why is it difficult for TradFi to replicate Perpetual Futures? The native innovation of the encryption world is igniting Wall Street's interest. First appeared in Chain News ABMedia.