The concept of perpetual futures has become a staple in the crypto financial landscape, but according to DRW CEO Don Wilson, many misconceptions surround this product. In a series of posts, Wilson clarifies that perpetual futures, or 'perps,' are essentially futures contracts without an expiration date. The features commonly associated with crypto perpetuals, such as high leverage and auto-deleveraging, are not inherent to the contracts themselves but rather a result of how some crypto exchanges have chosen to implement them. Wilson emphasizes that the characteristics often linked to perpetual futures are a result of the technological advancements and design choices of crypto exchanges, rather than the product itself.
He believes that regulators should focus on the economic substance of perpetual futures rather than their legal labels, arguing that they are economically equivalent to traditional futures. Wilson advocates for the broader adoption of perpetual futures across various markets, including commodities, securities, and crypto, as a tool for price discovery and risk management.