// LEARNastertutorialperpsfundamentalssurvival-kit·May 8, 2026·9 min read

Aster 101: What The Hell Is A Perp?

// First-principles primer on perpetual futures — what they are, how leverage works, why funding exists, and every term you'll meet on the trading screen. No money required. No experience required. Just read it.

The wasteland trades 24/7, but you don't have to set foot in it blind. This is part one of a three-part survival kit for traders who've never opened a perp. Read it once, the next two articles will make sense. Skip it, and you'll get rekt for reasons you don't even understand.

By the end of this article, you'll know:

  • What a perp actually is, and how it differs from buying a coin
  • What leverage does — and what it does to you when it doesn't work
  • Why funding payments exist and which way they flow
  • The seven terms that show up on every trading screen and confuse every newcomer

No money required. No wallet required. Just keep reading.

// SPOT VS. PERP — TWO WAYS TO BET ON A PRICE

You can bet on a coin going up two ways.

Spot: You buy the actual coin. You own it. If BTC goes from $80k to $100k, you made $20k worth of BTC. If it goes to $40k, you're holding $40k worth of BTC and waiting for it to recover. You can hold forever. The position never expires.

Perpetual ("perp"): You don't buy the coin. You open a contract that says "I'm betting BTC goes up." If BTC goes up, the contract pays you. If it goes down, the contract eats your collateral. You never touch the actual coin. You also never have to deliver — perps have no expiration date, hence "perpetual."

The Forge tracks perp DEXes specifically because perps are where the funding fights happen. And funding is where the money is.

// PERP A contract that bets on a coin's price without ever owning it. No expiration date. Settles in stablecoins (USDT usually). Funding payments keep the perp price honest.

// LONG Position that profits when price goes up.

// SHORT Position that profits when price goes down. Yes, you can bet against a coin without owning it. That's the whole point.

// LEVERAGE — BORROWED MUSCLE

A perp lets you put up less money than the position is worth. That's leverage.

Open a $100 BTC long with 5x leverage, and you control $500 of exposure. If BTC goes up 1%, your position gains $5 — that's a 5% return on your original $100. Leverage multiplies your wins.

It also multiplies your losses.

If BTC drops 20% and you have 5x leverage, your position lost $100 — your entire collateral. That's called liquidation. Position closed. Money gone. The exchange takes the rest to cover any shortfall, and they get to keep the lights on.

The math is brutal and symmetric:

  • 2x leverage → 50% drop wipes you (very rare on BTC)
  • 5x leverage → 20% drop wipes you (uncommon)
  • 10x leverage → 10% drop wipes you (happens monthly on alts)
  • 50x leverage → 2% drop wipes you (happens before lunch)
  • 100x leverage → 1% drop wipes you (what are you doing)

Aster lets you crank leverage up to 200x. Don't.

// LEVERAGE Borrowed buying power. 5x leverage means $1 of collateral controls $5 of position size. Multiplies gains and losses equally.

// LIQUIDATION When losses eat through your margin and the exchange force-closes your position to prevent it going negative. Your collateral is gone, your position is flat, and you're back to zero on that trade.

// MARGIN The money you put up as collateral for a leveraged position. The buffer between you and liquidation.

// THE FUNDING SLUSH FUND

A perp's price would normally drift away from the real (spot) price — there's nothing forcing them to match. But a perp's whole purpose is to track the real asset. So exchanges invented funding payments to keep them tethered.

Every funding interval (Aster pays every hour, others pay every 4 or 8), the platform calculates the difference between the perp price and the spot index. Then:

  • If perps are trading above spot → longs are too aggressive → longs pay shorts to even it out
  • If perps are trading below spot → shorts are too aggressive → shorts pay longs to even it out

The amount is small in absolute terms (often hundredths of a percent per interval), but pay it every hour for a year and you're talking about real money. Annualize a 0.05% hourly rate and you get 438% APR. That's why the Forge exists — to find symbols where one side is paying a heavy tax to be in the trade.

You can see this on every trading screen. Here's what it looks like on a real altcoin position on Aster:

Aster funding indicator showing 0.2519% per interval, countdown 00:45:21

That 0.2519% is the funding rate. The 00:45:21 is how long until the next payment. If you're long this asset, in 45 minutes a chunk of your collateral becomes someone else's. If you're short, the opposite.

// FUNDING RATE The percentage paid between longs and shorts each interval. Positive = longs pay shorts. Negative = shorts pay longs.

// FUNDING INTERVAL How often funding is paid. Aster: 1 hour. Others: 4h or 8h. Shorter intervals = funding pressure can shift faster.

For the deep dive on funding mechanics and how to harvest it as a strategy, read What Is Funding (And Why It Pays You).

// MARK PRICE VS. INDEX PRICE VS. LAST PRICE

This is where beginners get rekt. There are three prices on every trading screen and they mean different things.

  • Index Price — Average of spot prices across major exchanges. The closest thing to "true price."
  • Mark Price — A blend of index price + funding adjustments. This is what triggers your liquidation. Not last price. Not what you see ticking on the chart. Mark price.
  • Last Price — The price of the most recent trade on Aster itself. Least useful for risk management. Can spike or wick wildly during low-liquidity moments.

Why this matters: a wick on Aster's chart can show price diving way below your liquidation level for a split second, but if the mark price didn't dive (because index didn't dive), you don't get liquidated. Conversely, if mark price quietly drifts past your liquidation, you're done — even if last price never visibly touched it.

Watch mark price. Set your stop-losses against mark price. The chart can lie.

// INDEX PRICE Average of spot prices from major exchanges. The reference truth.

// MARK PRICE What determines your liquidation. Closer to index than last price. The number that actually matters for survival.

// CROSS VS. ISOLATED MARGIN

When you open a position, your collateral can be isolated (just the margin you set) or cross (your whole account).

  • Isolated: You set $100 margin on a position. If it gets liquidated, you lose $100. The rest of your account is untouchable.
  • Cross: Your whole USDT balance is collateral for that position. If the position runs against you hard, it can pull from your other money to stay alive — until it can't, at which point everything goes.

For your first trades, always isolated. Always. Cross is for traders who know exactly when they want it (delta-neutral hedging, multi-position offsets) and even then it's a footgun. You'll see this exact decision on Aster's margin mode modal in the next article.

// ISOLATED MARGIN Only the margin you set is at risk. Account survives a liquidation.

// CROSS MARGIN Whole account is collateral. Position can survive longer, but if it dies, everything dies with it.

// ORDER BOOK, TAKERS, MAKERS

The order book is a list of every buy and sell order waiting to fill at every price. Bids (buyers) below current price, asks (sellers) above.

When you trade, you're either a taker or a maker:

  • Taker — You hit an existing order in the book. Fills instantly. Pays a higher fee.
  • Maker — You place an order that sits in the book waiting. Might never fill. Pays a lower fee (sometimes earns a rebate).

Beginners default to market orders, which are taker fills. That's fine for small sizes. As size grows, makers save you real money in fees.

// TAKER Aggressive order that hits the book. Fills now. Higher fee.

// MAKER Passive order that joins the book. Waits. Lower fee, sometimes a rebate.

// REDUCE-ONLY — THE FAT-FINGER SHIELD

One last term, because it's important and Aster makes it easy to find:

Reduce-Only is a checkbox on every order. When it's on, the order can only shrink an existing position — never grow one. So if you have a 1 BTC long and you mean to close it, but you accidentally hit Buy instead of Sell, the order won't go through because Buy would increase your long. Reduce-Only refuses to execute.

Use it on every close until the muscle memory is automatic. Costs nothing. Saves accounts.

// REDUCE-ONLY Safety toggle on every order. Order can only reduce an existing position, never grow one. Use on every close.

// THE MAP OF WHERE WE'RE GOING

Now you know the language. The next two articles take you onto the trading screen.

Aster homepage — the front door

That's Aster's front door. Decentralized perpetual contracts, non-custodial, $4.51T in lifetime trading volume, 16.82M users, 181 trading pairs at the time of this writing. The "Launch app →" button is where Article 102 picks up.

Up next in the survival kit:

The wasteland is loud, fast, and forgiving of nothing. But it's not magic. It's just a list of buttons that mean specific things. Now you know what they mean.

The Forge calculates. You sign. No refunds in the wasteland.

TRADE ON ASTER →

// FURTHER READING