Perpetual DEX Explained: Unlocking Continuous Trading on Decentralized Exchanges

A simple Perpetual DEX explanation.


Ivan Dimitrov

6/6/20232 min read


Welcome to the world of perpetual DEX, where continuous trading takes place on decentralized exchanges.

In this comprehensive guide, we'll delve into the concept of perpetual DEX, explain its unique features, how it differs from traditional exchanges, and its advantages for traders. Let's dive in!

Understanding Perpetual DEX:

A perpetual DEX, short for Decentralized Exchange, is a type of decentralized trading platform that enables continuous trading of perpetual contracts. Perpetual contracts are a form of derivative contracts that simulate the price movement of an underlying asset without an expiration date. They allow traders to speculate on the price of assets like cryptocurrencies, commodities, or indices without owning the actual asset.

How Perpetual DEX Works:

1. Liquidity Pools: Perpetual DEXs rely on liquidity pools to facilitate trading. Traders deposit their assets into these pools, which serve as collateral for their perpetual contracts.

2. Funding Mechanism: Perpetual contracts require a mechanism to maintain their market price close to the spot price of the underlying asset. This is achieved through a funding mechanism that rewards traders who take positions opposite to the prevailing market trend, ensuring balance and preventing price divergence.

3. Leverage Trading: Perpetual DEXs often support leverage trading, allowing traders to amplify their positions and potential profits or losses. Traders can select their desired leverage ratio, enabling them to trade with a fraction of the total contract value.

Advantages of Perpetual DEX:

Perpetual DEXs offer several advantages over traditional exchanges:

1. Decentralization: Perpetual DEXs operate on decentralized networks, removing the need for intermediaries and giving users full control over their assets.

2. Accessibility: Perpetual DEXs are accessible to anyone with an internet connection, allowing traders from around the world to participate without any geographical restrictions.

3. Continuous Trading: Perpetual DEXs enable 24/7 trading, providing liquidity and opportunities for traders to take advantage of price movements at any time.

4. Lower Trading Fees: Compared to traditional exchanges, perpetual DEXs often have lower trading fees, reducing costs for traders.

5. Non-Custodial: Perpetual DEXs allow traders to retain control of their funds throughout the trading process, reducing the risk of hacks or theft from centralized entities.


In this comprehensive guide, we've explored the concept of perpetual DEXs, where continuous trading takes place on decentralized exchanges. Perpetual DEXs offer traders the advantages of decentralization, accessibility, continuous trading, and non-custodial control over their assets. As the popularity of perpetual DEXs grows, it's important to stay informed, conduct proper risk management, and choose reputable platforms to ensure a secure trading experience.

Welcome to the world of perpetual DEX, where decentralized trading never sleeps!

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