Perpetual Futures
Overview
Perpetual futures on Frontier Chain offer leveraged trading without expiration dates, combining capital efficiency with institutional-grade risk management. Built on the same high-performance infrastructure that processes 369K orders/second for spot trading, perpetuals enable sophisticated trading strategies with transparent, on-chain execution.
Key Features:
Up to 40x Leverage: Maximum capital efficiency
No Expiration: Positions remain open until closed
Funding Rate Mechanism: Market-driven price anchoring to spot
Cross and Isolated Margin: Flexible risk management
Advanced Order Types: Stop loss, take profit, reduce-only
Real-Time Liquidations: Automated position monitoring
Emergency Fund: System stability protection
What Are Perpetual Futures?
Perpetual futures contracts allow traders to speculate on price movements with leverage, without the complexity of traditional futures that expire and settle.
Key Differences from Spot:
Leverage: Trade with up to 40x leverage
Short Selling: Profit from price declines
Funding Rates: Periodic payments between longs and shorts
Margin Requirements: Only need collateral, not full position value
No Delivery: Cash-settled, no physical asset delivery
Key Differences from Traditional Futures:
No Expiration: Hold positions indefinitely
Funding Mechanism: Replaces settlement/rollover
Continuous Trading: No gaps between contract periods
Mark Price: Oracle-based pricing to prevent manipulation
Core Concepts
Leverage Trading
What is Leverage?
Leverage amplifies your trading power by allowing you to control larger positions with less capital. For example, with 10x leverage, a $10,000 margin can control a $100,000 position.
Benefits:
Capital efficiency: Control larger positions
Profit amplification: Gains multiplied by leverage
Flexible strategies: Long and short opportunities
Risks:
Loss amplification: Losses also multiplied
Liquidation risk: Positions closed if margin insufficient
Funding costs: Holding costs in one-sided markets
Learn more about Margin & Leverage →
Margin Types
Isolated Margin:
Each position has dedicated margin
Liquidation only affects specific position
Clear per-position risk
Ideal for speculative trades
Cross Margin:
All positions share account balance
Automatic margin addition prevents liquidation
Maximum capital efficiency
Best for hedged strategies
Learn more about Margin & Leverage →
Funding Rates
Purpose: Anchor perpetual prices to spot without expiration
Funding rates create periodic payments between longs and shorts to keep the perpetual price aligned with the spot market price.
How It Works:
Positive Funding (Perpetual > Spot): Longs pay shorts
Negative Funding (Perpetual < Spot): Shorts pay longs
Payment Frequency: Every 8 hours
Market-Driven: Rates based on price premium/discount
Trading Impact:
Adds holding cost or income
Affects position profitability
Can be used for arbitrage strategies
Important for longer-term positions
Learn more about Funding Rates →
Liquidation System
Automatic Risk Management
The liquidation system protects the exchange and users by automatically closing positions when margin falls below maintenance requirements.
Key Components:
Real-Time Monitoring: Position health checked every block
Mark Price: Oracle-based fair pricing prevents manipulation
Emergency Fund: Absorbs losses from liquidations
Auto-Deleveraging (ADL): Backup for extreme scenarios
Liquidation Trigger:
Learn more about Liquidation System →
Position Management
Complete Position Lifecycle
Opening:
Place market or limit order
Choose margin type and leverage
Position opens when order fills
Monitoring:
Track unrealized PnL in real-time
Monitor margin ratio and liquidation price
Receive funding payments every 8 hours
Modifying:
Add margin to reduce risk (isolated)
Reduce position size to take profit
Adjust leverage (isolated mode)
Closing:
Market close for immediate exit
Limit close for price control
Automatic via stop loss/take profit
Forced liquidation if margin insufficient
Learn more about Position Management →
Advanced Order Types
Stop Loss Orders
Automatically close position when price reaches stop level to limit losses:
Long Position: Stop below entry price
Short Position: Stop above entry price
Execution: Triggers market order at stop price
Use Case: Risk management and downside protection
Take Profit Orders
Lock in gains at target price:
Long Position: Target above entry price
Short Position: Target below entry price
Execution: Triggers market order at target
Use Case: Automated profit taking
Reduce-Only Orders
Only decrease position size, never increase:
Protection: Cannot accidentally increase exposure
Safety: No risk of position flipping
Use Case: Taking profits or scaling out
Post-Only Orders
Only add liquidity, never take:
Behavior: Cancelled if would immediately match
Benefit: Guaranteed maker fees
Use Case: Market making strategies
IOC and FOK Orders
Immediate-or-Cancel (IOC):
Execute immediately, cancel unfilled portion
Allows partial fills
Fill-or-Kill (FOK):
Execute completely or cancel entirely
No partial fills allowed
Performance and Execution
Trading Speed
Frontier Chain delivers institutional-grade execution speed:
Order Validation
2-5ms
EIP-712 signature verification
Block Time
100ms
Order execution and confirmation
Finality
300ms
Irreversible settlement
Total Latency
~150-200ms
End-to-end order to fill
Colocated Latency
<100μs
Direct validator connection
Throughput
20,000 Orders/Block: Maximum per 100ms block
200,000 Orders/Second: Theoretical capacity
369,000 Ops/Second: Measured performance including matching
Parallel Processing: Multi-core signature verification
Risk Management Features
Position Limits
Leverage-Based Limits:
Maximum 40x leverage available
Position size limits based on leverage
Automatic risk monitoring
Real-time margin calculations
Safety Mechanisms
Multi-Layer Protection:
Maintenance Margin: 50% of initial margin
Liquidation Engine: Automatic position closure
Emergency Fund: Absorbs liquidation losses
Auto-Deleveraging: Last-resort mechanism
Mark Price Oracle:
Prevents manipulation-based liquidations
Based on external spot exchanges
Updated every block (100ms)
Multiple data source redundancy
Fee Structure
Trading Fees
Same tier structure as spot, with separate rate schedules:
0
≤ $5M
0.0150%
0.0450%
1
≥ $5M
0.0120%
0.0400%
2
≥ $25M
0.0080%
0.0350%
3
≥ $100M
0.0040%
0.0300%
4
≥ $500M
0.0000%
0.0280%
5
≥ $2B
0.0000%
0.0250%
6
≥ $7B
0.0000%
0.0240%
Volume Weighting: (Spot Volume × 2) + (Perp Volume × 1)
Learn more about Fees and Tiers →
Funding Fees
Not Protocol Fees: Payments between traders only
Zero-Sum: One side pays, other receives
No Platform Fee: Frontier Chain charges nothing for funding
Pure Market Mechanism: Rates determined by supply/demand
Market Data
Real-Time Feeds
Position Metrics:
Unrealized PnL
Margin ratio
Liquidation price
Distance to liquidation
Market Data:
Mark price vs last price
Current and projected funding rates
Open interest
Long/short ratio
Order book depth
Historical Data
Complete trade history
Funding rate history
Liquidation events
Volume analytics
Position statistics
Key Advantages
Speed and Performance
100ms Execution: Fastest blockchain-based trading
300ms Finality: True irreversibility
No MEV: Fair ordering via gossip protocol
Deterministic: Guaranteed identical execution across validators
Transparency and Security
On-Chain Settlement: All trades recorded on blockchain
Verifiable Execution: Anyone can verify matching
Self-Custody: Users control private keys
Byzantine Fault Tolerance: Tolerates up to 33% malicious validators
Cost Efficiency
Low Fees: As low as 0.00% maker, 0.024% taker
No Gas Fees: Trading doesn't require individual gas payments
Efficient Liquidations: Minimal slippage
Competitive Funding: Market-driven rates
Getting Started
Prerequisites
Fund Your Account: Deposit USDC for margin
Understand Leverage: Start with lower leverage (1-5x)
Learn Risk Management: Use stop losses on all positions
Practice Position Sizing: Never risk more than 2-5% per trade
First Steps
Choose Your Market: Select a perpetual pair
Set Your Leverage: Start conservatively (1-5x)
Pick Margin Mode: Isolated for beginners, cross for advanced
Place Your Order: Market or limit entry
Set Stop Loss: Always protect your position
Monitor Position: Track PnL and liquidation risk
Deep Dive Topics
For detailed information on specific topics:
Leverage basics and calculation
Isolated vs cross margin
Margin requirements
Liquidation price calculation
Risk-adjusted leverage strategies
Purpose and mechanism
Rate calculation
Payment examples
Trading implications
Funding arbitrage strategies
Liquidation triggers
Liquidation process
Mark price and oracles
Emergency fund
Auto-deleveraging (ADL)
Opening positions
Monitoring metrics
Modifying positions
Advanced order types
Closing strategies
Conclusion
Perpetual futures on Frontier Chain provide institutional-grade leveraged trading with transparent, on-chain settlement and comprehensive risk management. The combination of advanced order types, flexible margin modes, and real-time liquidation monitoring enables sophisticated trading strategies while maintaining system stability.
Key Takeaways:
Maximum 40x leverage with flexible margin management
Funding rates anchor perpetual prices to spot markets
Advanced order types for automated risk management
Real-time liquidation engine protects system solvency
Transparent, on-chain execution and settlement
100ms block times with 300ms finality
Next Steps:
Margin & LeverageFunding RatesLiquidation SystemPosition ManagementFees and TiersLast updated