What Is Perpetual Swap?
A perpetual swap is a derivatives contract similar to perpetual futures but typically settled in the underlying cryptocurrency rather than USD. The distinction matters for PnL calculation and margin: coin-margined perpetual swaps use BTC as collateral and settle PnL in BTC, while USDT-margined perpetual futures use stablecoins.
How Perpetual Swap Works
Coin-margined swaps create a convexity effect: when BTC rises, both the position value and the collateral value increase, amplifying gains. Conversely, when BTC falls, both decline, amplifying losses. This non-linear payoff profile makes coin-margined swaps more volatile than linear (stablecoin-margined) contracts for the same leverage.
Why It Matters for Traders
Choosing between coin-margined and stablecoin-margined perpetuals depends on your strategy. Coin-margined swaps are preferred by holders who want to maintain BTC exposure while trading, and by those who believe BTC will appreciate (the convexity works in their favor). Stablecoin-margined perpetuals offer simpler PnL calculation and stable collateral, preferred for hedging and short-term trading.