Z2O - Decentralized Perpetual Futures

Introduction and Opportunity

In the last issue of DeFi Digest, we dove into decentralized options, a ‘Zero-to-One’ primitive that can onboard the next wave of DeFi users. Perhaps long overdue, this week we dive into decentralized perpetual futures, an instrument native to the digital asset space.

A regular futures contract is simply a contractual legal agreement to buy or sell an asset at a predetermined price at a specified time in the future. Futures contracts are highly standardized and can be purchased via various futures exchanges. In contrast to options, futures contracts buyers and sellers are obligated to deliver underlying assets^[1] at the future expiration date. Additionally, futures contracts allow investors to gain different levels of leveraged exposure to the underlying asset.