Wall Street veteran claims regulators have completely misunderstood perpetual contracts, which are essentially futures contracts with no expiration date.

DRW Founder and CEO Don Wilson published a post systematically clarifying common market misconceptions about perpetual futures. He noted that perpetual futures are essentially just futures contracts with no expiration date—nothing more. The market’s current perceptions of perpetual contracts, such as high leverage, auto-deleveraging (ADL), 24/7 trading, and continuous margin settlement, are not inherent attributes of the contracts themselves, but product design choices made by crypto trading platforms leveraging digital collateral and real-time margin calculation environments. Wilson explicitly stated he dislikes the ADL mechanism, emphasizing "there is no reason it must be used on perpetual contracts." He added that the true innovative value of perpetual contracts lies in eliminating the need for investors to repeatedly roll over positions, thereby significantly reducing transaction costs, minimizing market impact and rollover slippage, and allowing positions to track the front end of the futures curve more closely. Regarding the ongoing U.S. regulatory debate over whether perpetual contracts should be classified as futures or swaps, Wilson urged regulators to base their determinations on economic substance: "There is no reason to treat them as swaps solely because they have no expiration date. Economically, they are futures." He called for broader adoption of perpetual futures across various markets—including commodities, securities, and crypto assets—as tools for price discovery and risk management, rather than labeling them as crypto-exclusive high-risk gambling products. Current U.S. market interest in bringing perpetual contracts to regulated platforms continues to rise, with parties still debating their legal classification. Wilson’s remarks provide a clear stance from a seasoned market participant in this regulatory debate.