DRW founder and CEO Don Wilson said the market and regulators are getting perpetual futures wrong. In a July 29 post, Wilson argued that a perpetual future is simply a futures contract without an expiration date, and that many features commonly associated with crypto perpetuals are not inherent to the instrument itself. He said high leverage, auto-deleveraging, 24/7 trading, and continuous margining reflect product design choices made by crypto venues operating with digital collateral and real-time margin systems, rather than defining traits of perpetual contracts.
Wilson also took aim at auto-deleveraging, saying he does not like the ADL mechanism and sees no reason why perpetuals must rely on it. He said the real benefit of perpetual futures is that traders do not need to keep rolling positions from one contract month to the next. In his view, that lowers trading costs, cuts market impact and roll slippage, and keeps exposure closer to the front end of the futures curve. As U.S. regulators continue debating whether perpetuals should be treated as futures or swaps, Wilson urged them to classify the product by economic substance. A contract should not be labeled a swap simply because it has no expiry, he said, adding that perpetuals should be used more broadly across commodities, securities, and crypto markets as tools for price discovery and risk management.
DRW founder and CEO Don Wilson said in a July 29 post that the market has widely misunderstood perpetual futures, arguing that the product is fundamentally just a futures contract with no expiration date.
Wilson said many of the traits now commonly linked to perpetual contracts — high leverage, auto-deleveraging, 24/7 trading, and continuous margin settlement — are not necessary features of the contract itself. Instead, he said, they are product design decisions made by crypto trading platforms using digital collateral and real-time margin calculation systems.
On auto-deleveraging, Wilson said plainly that he does not like the ADL mechanism and added that there is “no reason” perpetual contracts must use it.
He said the real innovation in perpetual futures is that investors do not have to repeatedly roll positions from one delivery month into the next. That, in his view, can sharply reduce trading costs, lower market impact and roll slippage, and allow positions to stay closer to the front end of the futures curve.
Wilson also addressed the current U.S. regulatory debate over whether perpetual contracts should be classified as futures or swaps. He urged regulators to focus on economic substance, writing, “There is no reason to call it a swap simply because it has no expiry. In economic substance, it is a future.”
He called for broader use of perpetual futures across commodities, securities, and crypto assets as tools for price discovery and risk management, rather than treating them as crypto-specific high-risk gambling products.
Interest in bringing perpetual contracts onto regulated U.S. platforms continues to rise, while debate over their legal classification remains unresolved. Wilson’s comments add a clear position from a veteran market participant to that discussion.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
