What is NFT Perpetual Contract?

An NFT perpetual contract is a financial instrument offered by that allows traders to participate in the NFT market through leveraged trading without the need to own the underlying NFTs. Similar to traditional perpetual contracts, an NFT perpetual contract has no expiration date, providing traders with the flexibility to hold their positions for as long as they desire.

D's NFT perpetual contracts offer several key features:

1. Non-Expiry: Penals's NFT perpetual contracts do not have a predetermined expiration date. Traders can maintain their positions indefinitely, giving them the freedom to capture potential price movements in the NFT market.

2. Leverage: Penals enables traders to amplify their trading capital by providing leverage, allowing them to open positions with a fraction of the contract's value as collateral. This feature enhances traders' ability to maximize potential returns from their NFT trading strategies.

3. Funding Rate: Penalsemploys a funding rate mechanism to ensure that the perpetual contract's price closely tracks the floor price of the underlying NFTs. The funding rate helps balance the supply and demand dynamics between buyers and sellers, ensuring the contract's price aligns with the market.

NFEX Perpetual Market Mechanics:

To effectively trade NFT perpetual contracts, traders should understand the following market mechanics:

• Multiplier: Each Penals perpetual contract has a specified leverage multiplier that determines the amount of leverage available for trading.

• Position Marking: Penals adopts the Fair Price Marking method to determine the mark price of perpetual contracts. The mark price is crucial in calculating unrealized profits or losses and triggering liquidation events.

• Initial Margin and Maintenance Margin: These margin levels dictate the amount of leverage a trader can utilize and define the threshold at which a liquidation occurs to prevent excessive losses.

• Funding:Penals's perpetual contracts undergo funding events approximately every 1 hour. Traders with open positions during funding events may receive or pay funding fees based on the prevailing market conditions.

Penals' NFT perpetual contracts provide traders with a powerful tool to engage in leveraged NFT trading, offering flexibility, potential profit opportunities, and risk management capabilities. By leveraging these features, traders can actively participate in the dynamic NFT market and pursue their trading strategies with confidence.