Perpetual Contract + Tokenization: Behind the RWA craze?

# Author: Nina Bambysheva, Forbes  

# Translator: Saoirse, Foresight News  

Today, let’s talk about a niche yet intriguing area in the crypto space: perpetual futures for tokenized Real-World Assets (RWAs). It sounds a bit complicated, but many insiders believe that what will truly ignite the RWA boom may not be the currently popular tokenized stocks, but these underlying derivatives. Let’s break down the mechanics behind this today.  

## A Quick Look at "Perpetual Contracts"  

Perpetual futures (or "perpetual contracts") are a type of cryptocurrency derivative that allows traders to bet on the future price of an asset, with no expiration date for the contract. For example, if you are bullish on Bitcoin, you can buy a Bitcoin perpetual contract and hold it for as long as you want.  

This type of trading does not require upfront full payment of funds; only a margin— a small portion of the transaction amount— is needed, with the rest covered by leverage. This means that a small amount of capital can control a large position, which is one of the reasons perpetual contracts are favored by traders.  

Naturally, some may ask: Without an expiration date, how to prevent the contract price from decoupling from the actual market price? The answer lies in the "funding rate" mechanism. Every few hours, a fee settlement occurs between parties with opposite trading directions in the market: if long demand is stronger, longs pay shorts; if the market turns bearish, shorts pay longs. During the holding period, this fee is automatically deducted from or credited to the account. For instance, if you hold a Bitcoin long contract worth $10,000 and the funding rate for a certain period is 0.01%, you will need to pay $1 to shorts during settlement; if you hold a short position, you will receive $1.  

It may sound complex, but traders are fond of it. According to CoinGecko data, the trading volume of perpetual contracts on centralized exchanges reached $58.5 trillion in 2024, more than three times that of the spot market; the trading volume on decentralized exchanges also hit $1.5 trillion.  

## The Collision of Tokenization and Perpetual Contracts  

Now, let’s turn to another hot topic in the crypto sector: tokenization. Industry executives often say that "the market is moving on-chain." From Larry Fink of BlackRock to Vlad Tenev of Robinhood, they have all painted a vision: in the future, Tesla stocks, Apple stocks, bonds, and even grandma’s antique collection could be traded on blockchains. The market would never close, settlement time would be shortened from two days to a few seconds, and funds tied up in the settlement process could be reactivated.  

While platforms like Robinhood and Kraken have launched tokenized stocks, more trading activity is happening in the perpetual contracts of these assets. The reason is simple: traders don’t just want to hold tokenized Apple stocks; they are more eager to profit by betting on price fluctuations.  

Take xStocks, launched in late June— a tokenized product for stocks and ETFs. It can be traded on centralized exchanges such as Kraken and Bybit, as well as decentralized exchanges on the Solana chain like Raydium and Jupiter. Currently, its trading volume has reached $558 million.  

There is also iAssets, launched by Injective Labs (the developer of the Injective blockchain), which is traded on the Helix decentralized exchange, with a cumulative trading volume exceeding $1.7 billion. Unlike direct stock representation, iAssets are perpetual futures pegged to entities such as the "Magnificent Seven" tech giants, Circle, and even SharpLink Gaming (with Ethereum as its core capital). Similar to most crypto perpetual contracts, iAssets support leveraged trading, usually with a maximum leverage of 25x.  

"Last week alone, the trading volume was $107 million, and the week before that, it reached $291 million," said Eric Chen, Co-Founder and CEO of Injective. The trading fee is usually around 0.05%, and Injective does not actually hold shares of Circle or NVIDIA. Instead, it obtains real-time stock prices from the traditional market through "oracles." iAssets only need to track these prices to allow traders to speculate on the underlying stocks.  

John Wang, the newly appointed Head of Cryptocurrency at Kalshi, summarized the appeal of RWA perpetual contracts: "Want to trade $1 billion worth of Apple-related assets? You don’t need to actually raise $1 billion worth of stocks— you just need long and short positions of the corresponding value." Simply put, no one is actually buying Apple stocks; traders are just betting on price rises or falls, and the sum of these bets forms a trading scale of $1 billion. With leverage added— under 25x leverage, $40 million can control a $1 billion position.  

"Most RWAs are not assets people want to hold for the long term. Traders don’t care about dividends, transfer rights, or voting at shareholder meetings. They just want to trade: 10x long on the S&P 500, short on Tesla, trade oil based on CPI data, bet on interest rate trends..."  

This makes sense. Some joke that the core product in the crypto space is "tokens," and if that’s the case, new ways of speculation may be the "real innovation" in this industry. This is part of the reason why platforms like Polymarket, Pump.fun, and Hyperliquid— the perpetual contract giant that holds an 80% market share— have achieved great success.  

## The Question: Will Perpetual Contracts Make Spot Trading Irrelevant Before Tokenized RWAs Take Hold?  

Eric Chen of Injective doesn’t think so. He says that without tokenized Tesla stocks as a market anchor, synthetic derivatives like iAssets would struggle with pricing chaos and insufficient liquidity.  

In traditional finance, market makers that provide liquidity for derivatives (options or futures) of assets like Tesla often hedge risks by trading the underlying stocks— and the same applies in the crypto sector. Tokenized spot assets provide traders with risk hedging tools; even if perpetual contract trading volume dominates, spot RWAs remain the foundation.  

If you think about it, traders are essentially betting on "derivatives of derivatives" of companies like Tesla and NVIDIA. This sounds a bit absurd, as if crypto has complicated things again. So why not trade options or futures directly through regular brokers?  

Because for crypto users, these products are more "user-friendly"!  

"Perpetual contracts are much simpler than options," said TK Kwon, Co-Founder of tokenization startup Theo. "The mechanisms of pricing and funding rates are basic and easy for anyone to understand (though I have my doubts about that), and the capital efficiency is very high." In practice, this means traders only need to prepay a small portion of funds to control large positions through leverage, and they can roll over the contract indefinitely without worrying about expiration dates or the complex algorithms behind option pricing.  

By contrast, trading stock options or futures in the U.S. has much higher barriers— it usually requires "accredited investor" status or operation through brokers that can access platforms like the Chicago Mercantile Exchange (CME).  

TK Kwon hopes that Theo will eventually operate both spot and perpetual contract markets. For example, on the same platform, users can both buy tokenized gold (spot) and bet on gold’s future price (gold perpetual contracts). This model can spawn strategies like "arbitrage trading," where traders profit from small price differences between the two. For professionals, this is a routine operation; for the entire market, it can improve liquidity.  

And this day may come soon: Hyperliquid, the perpetual contract giant, is planning to upgrade its system to allow anyone to create new perpetual contract markets for almost any asset.  

Ultimately, the significance of tokenization goes beyond "putting Apple stocks on-chain"; it lies more in the series of actions traders take after on-chain listing: betting, hedging, and adding leverage. The creativity of crypto developers should not be underestimated, especially when designing new trading (speculative) methods for the digital assets they create. This creativity is both a good thing and a potential source of trouble.  

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