Perpetual Swap Yields

Perpetual Swap Yields are the returns generated by collecting funding payments in a perpetual futures contract. These yields are driven by market sentiment; when traders are bullish and demand leverage to go long, they pay a premium to short sellers.

This creates a source of income that is largely independent of the absolute price of the underlying asset. Investors can earn these yields by maintaining a short position in the perpetual swap while holding the equivalent spot asset.

This strategy is a primary driver of liquidity in the crypto derivatives market, as it attracts capital seeking stable, non-directional returns. However, the yields are variable and can turn negative if market sentiment shifts, requiring active management to maintain the desired return profile.