Similar to financial derivatives in the stock market, crypto derivatives, embodied in options and future contracts, facilitate liquidity.
Options
Crypto options enable the option buyer to buy or sell a crypto at a target price by a future date. Buyers may choose not to exercise their options.
Futures and Perpetual Futures
Crypto futures have a duration, and futures buyers bet on a token price rising (going long) or declining (going short) by a certain date.
Popular among day traders, there is no expiration date on a perpetual futures contract. Also called "perpetual swaps," accounts must contain a minimum (margin), and traders pay a holding fee. See
crypto liquidity pool.