Perp DEX Explained: How Funding Rate, Liquidation and Taxes Work on Perpetual Futures

Trading in perpetual contracts is shifting away from exchanges that hold a customer account for you and towards venues where you sign every order with your own wallet. These venues are called perp DEX. Anyone reading the abbreviation for the first time will usually find either marketing copy or documentation written for developers. This article sits in between: it explains what happens when you open a position there, which costs accrue while it runs, and where the construction breaks. One point up front: a perpetual is a leveraged product. The figures below come from the public documentation of individual venues and describe their own rules, not an industry standard. Perp DEX vs Crypto Exchange: The Difference in Structure A perp DEX is a venue for open-ended futures contracts that works without a customer account in the traditional sense. You do not place a deposit with a company that holds it for you. Instead you post collateral into a smart contract and authorise every action with your own key. No central operator runs an account in your name, and as a rule nobody can bar you from trading. That sounds like a detail of custody, but it has consequences: there is no deposit protect...