Many new users just starting out with crypto derivatives often wonder: What are Perpetual Futures? And how do they differ from traditional Delivery Futures contracts? This article will thoroughly explain the core concept of Perpetual Futures in simple terms, and clarify why they represent a more beginner-friendly starting point for new users. More importantly, compared to other trading platforms, KuCoin's Perpetual Futures offer a superior trading experience thanks to their unique advantages, making KuCoin an ideal platform for beginners to start futures trading.
I. Core Concept: The Essential Difference Between Perpetual Futures and Delivery Futures
Before diving into Perpetual Futures trading, it is crucial to understand the fundamental differences between it and traditional Delivery Futures contracts:
| Feature | Perpetual Futures | Delivery Futures |
| Expiration | No expiration date; positions can be held indefinitely. | Has a clear expiration date (e.g., quarterly, monthly). |
| Settlement | No physical settlement; closure is done by simply closing the position. | Must be settled or closed at the agreed price upon expiration. |
| Price Anchoring | Anchored to the Spot Price via the Funding Rate mechanism. | Price converges to the spot price as the expiration date nears. |
| Complexity | Simple operation; beginner-friendly. | Requires handling contract roll-overs; more complex operation. |
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Funding Rate: The Core Mechanism of Perpetual Futures
The reason Perpetual Futures can be "perpetual" while closely tracking the Spot Price lies entirely in the Funding Rate.
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Definition: The Funding Rate is a fee exchanged regularly (usually every 8 hours) between long and short position holders.
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Principle: When the Perpetual Futures price is higher than the Spot Price, the Funding Rate is positive; longs pay shorts, encouraging selling (shorting), which pushes the contract price down. Conversely, if the contract price is lower than the Spot Price, the Funding Rate is negative; shorts pay longs, encouraging buying (longing), which pushes the contract price up.
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Importance: As a new user, you need to know this fee will either be deducted from or added to your Margin, representing an "implicit cost" or "benefit" of holding a Perpetual Futures position.
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Why are Perpetual Futures more like Spot Trading with Leverage?
Since Perpetual Futures have no expiration date, they eliminate the pressure of forced closure present in traditional Delivery Futures. When you are bullish on an asset's long-term trend, you can use Perpetual Futures with Leverage to amplify returns without worrying about being forced to close due to contract expiry. This makes the trading experience of Perpetual Futures closer to leveraged spot trading.
II. Why are Perpetual Futures Highly Recommended for New Users? (Beginner-Friendliness and Risk Management)
For new users entering the field of crypto futures trading, choosing Perpetual Futures significantly lowers the barrier to entry and the learning curve:
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Simplified Operations: New users don't need to be distracted by the renewal or roll-over issues of different monthly Delivery Futures. They can focus solely on one Perpetual Futures trading pair, concentrating their efforts on core market analysis and risk management.
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Avoidance of Forced Delivery Risk: As long as the Margin is sufficient, a Perpetual Futures position will not be forced into closure due to expiration. In Delivery Futures, even if your judgment is correct, you might incur a loss if the contract expires before the target price is reached.
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High Liquidity, Low Slippage: As the most popular derivative product on the market, the liquidity of Perpetual Futures far surpasses most Delivery Futures. High liquidity means your buy and sell orders are more likely to be executed at the optimal price, reducing the overall trading cost and minimizing losses from slippage, which is crucial for active new users.
III. In-Depth Analysis of the KuCoin Perpetual Futures Platform: Three Unique Advantages
Choosing a safe, efficient, and beginner-friendly futures trading platform is the key to success. As a leading global digital currency trading service platform, KuCoin offers unparalleled competitive advantages in the Perpetual Futures arena:
Advantage 1: Optimized Trading Cost Control and Maximized Capital Efficiency
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Industry-Leading Low Fee Structure: KuCoin understands that trading fees are the hidden cost of long-term profitability. The platform offers highly competitive Maker/Taker fee rates for Perpetual Futures, which significantly lowers the overall trading cost, especially for high-frequency or large-volume traders.
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Flexibility of Cross-Margin Mode: KuCoin's supported Cross-Margin mode allows you to use the entire balance of your Futures Account as shared Margin for all positions. This not only significantly enhances capital utilization efficiency but also provides stronger resistance to liquidation during volatile markets, helping new users better implement risk management.
Advantage 2: Deep Market Liquidity and Excellent User Experience
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Guaranteed Ultra-High Liquidity: Thanks to its vast global user base and advanced matching engine, the order book depth of KuCoin Perpetual Futures is among the best in the industry. This means that even during large trades, slippage remains at a minimal level, ensuring your orders are executed at the best possible price, providing a professional trading experience.
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Multi-Tier Trading Interface: KuCoin offers both Lite and Professional trading interfaces. New users can quickly get started with the intuitive Lite interface, while experienced traders can utilize the Professional version with its rich charting tools, indicators, and advanced order types (like Post-Only, Iceberg), meeting the needs of all user levels.
Advantage 3: Thoughtful Beginner Protection and Comprehensive Learning Tools
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Zero-Risk Paper Trading Environment: This is one of the most important tools KuCoin offers new users. Before committing real money, you can use the Paper Trading feature to practice Perpetual Futures trading in a realistic environment, test strategies, and familiarize yourself with operations—all at zero cost, thus strengthening your futures trading knowledge and risk management skills.
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Futures Trial Funds and Beginner Rewards: KuCoin often provides Futures Trial Funds or subsidies for newly registered users. This fund can be used for real futures trading, and any profits generated can be withdrawn, while losses are covered by the platform. This effectively provides new users with a risk buffer, encouraging them to confidently start live trading.
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Robust Risk Control System: KuCoin has established an industry-leading risk management and insurance fund mechanism, effectively coping with extreme market volatility and safeguarding user assets, thus providing security for Perpetual Futures trading.
Conclusion and Action Plan
Perpetual Futures, with their no-expiration and high liquidity features, are the best gateway for you to enter the world of cryptocurrency leverage. They significantly lower the entry difficulty for new users. Choosing a futures trading platform like KuCoin, which excels in trading cost, liquidity, risk management, and beginner-friendliness, is undoubtedly the solid first step toward your success.
KuCoin will not only help you smoothly get started but will also continue to provide professional-grade Perpetual Futures trading support as your skills advance.
Related Links:
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https://www.kucoin.com/futures
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https://www.kucoin.com/support/26683745436441
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https://www.kucoin.com/en-au/news/articles/futures-trading-the-ultimate-risk-management-guide-for-kucoin
