Types

Futures contracts are mainly used to speculate with leverage and to hedge.

Contract types

CeFi

Two types of contract futures exist in crypto CeFi:

• Perpetual futures. A funding fee is charged on a regular basis, e.g. each 8h, to keep the price of a future contract as close as possible as the spot price. The issue with the funding rates is that they are unpredictable, i.e. depending on the market conditions you can receive or pay money. In a nutshell, no one can control their costs reliably with perpetuals.

• Expirable futures. These instruments have expiry dates, e.g. a monthly contract can be traded up to the end of the month. When a trader buys/sells a contract, she knows exactly her costs.

	Perpetual futures	Expirable futures
+	No expiration date	Control about the costs
-	No control about the costs	Expiration date

In crypto cefi the total volume traded in 2020 was $12 trillions. 39% of this volume is traded on expirable futures and 61% on perpetual futures (source: TokenInsight).

DeFi

To our knowledge, only perpetual futures exist in mainet with the biggest player being perpetual protocol. Vanilla protocol has been created to bring expirable futures to DeFi, e.g. for ETHDAI one could have futures expiring in a week, a month and a quarter.