Perpetual futures (perps) let you trade with leverage without an expiration date. On Solana, you can go long or short on dozens of tokens with up to 100x leverage — all on-chain, no KYC, and with sub-second execution. This guide walks you through everything you need to know to place your first perp trade on Solana.
What Are Perpetual Futures?
A perpetual future is a derivative contract that tracks the price of an asset without ever expiring. Unlike traditional futures that settle on a specific date, perps run indefinitely as long as you maintain your position.
Key concepts:
Leverage: Trade with more capital than you deposit. 10x leverage means a $100 deposit controls a $1,000 position. Your gains and losses are amplified by the same factor.
Long vs Short: Go long if you think the price will increase. Go short if you think it will decrease. Perps make it equally easy to profit from both directions.
Margin: The collateral you deposit to open a position. On Solana perp protocols, this is typically USDC, SOL, or other supported tokens.
Liquidation: If your position moves against you enough that your margin can't cover the loss, the protocol automatically closes your position. This protects the system but means you lose most or all of your margin.
Funding rate: A periodic payment between longs and shorts that keeps the perp price close to the spot price. If more traders are long, longs pay shorts. If more traders are short, shorts pay longs. Funding is typically settled every hour on Solana protocols.
Solana Perp Protocols Overview
There are four main perpetual trading protocols on Solana. Each has a different architecture and set of trade-offs.
Drift is the largest perp DEX on Solana by open interest.
- Model: Hybrid order book + virtual AMM (vAMM)
- Markets: 30+ perpetual markets
- Leverage: Up to 20x
- Collateral: USDC, SOL, mSOL, JitoSOL, and other tokens
- Extra features: Spot trading, lending/borrowing, prediction markets, insurance fund staking
Drift's hybrid model means your order first tries to match against other traders' limit orders (the order book). If there's no match, it fills against the vAMM at an algorithmically-determined price. This provides good liquidity even in less popular markets.
Zeta Markets runs a fully on-chain central limit order book (CLOB).
- Model: On-chain order book (no AMM component)
- Markets: 20+ perpetual markets
- Leverage: Up to 20x
- Collateral: USDC primarily
- Extra features: Clean interface focused on the trading experience
Zeta's pure order book model means all trades are matched between counterparties. This can provide better pricing for limit orders but might have wider spreads on less liquid pairs.
Flash Trade uses an oracle-based model.
- Model: Oracle-based pricing (trades execute at oracle price)
- Markets: 15+ perpetual markets
- Leverage: Up to 100x
- Collateral: USDC, SOL
- Extra features: Zero price impact on entries and exits
Flash Trade's oracle model means your trade executes at the current oracle price regardless of position size. There's no slippage from order book depth or AMM curves. This is great for larger positions but requires trusting the oracle feed accuracy.
Adrena is a newer perp protocol focused on a streamlined trading experience.
- Model: Pool-based with oracle pricing
- Markets: Growing list of major pairs
- Leverage: Up to 100x
- Collateral: Multiple tokens supported
- Extra features: Community-focused with incentive programs
Step-by-Step: Your First Perp Trade on Drift
Let's walk through opening a leveraged position on Drift, the most popular option.
Step 1: Set Up Your Wallet
You need a Solana wallet with funds. Phantom is the most popular choice.
- Install Phantom from phantom.app
- Create or import a wallet
- Fund it with SOL (for transaction fees) and USDC (for margin)
- You need at least 0.05 SOL for gas and whatever amount of USDC you want to trade with
Step 2: Connect to Drift
- Go to app.drift.trade
- Click "Connect Wallet" and select Phantom
- Approve the connection in your wallet
Step 3: Deposit Collateral
Before trading perps on Drift, you need to deposit collateral into your Drift account.
- Click "Deposit" in the top navigation
- Select USDC (or SOL if you prefer)
- Enter the amount — start small, perhaps $50-100 for your first trade
- Confirm the transaction in your wallet
Your deposited funds appear in your Drift account balance. This is your available margin.
Step 4: Open a Perpetual Position
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Navigate to the "Perp" tab
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Select your market — SOL-PERP is a good starting point
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Choose your direction:
- Long if you think SOL price will go up
- Short if you think SOL price will go down
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Set your position parameters:
- Order type: Market (executes immediately) or Limit (executes at your price)
- Size: The notional value of your position (e.g., $500)
- Leverage: Start with 2-3x maximum as a beginner
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Review the details shown:
- Entry price: The estimated fill price
- Liquidation price: The price at which your position gets forcibly closed
- Fees: Trading fee for opening the position
- Margin required: How much of your deposit is locked as collateral
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Click "Open Long" or "Open Short"
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Confirm the transaction in Phantom
Step 5: Monitor Your Position
Once open, your position appears in the "Positions" tab at the bottom of the screen. You'll see:
- Unrealized PnL: Your current profit or loss
- Entry price: Where you entered
- Mark price: Current market price
- Liquidation price: Where your position gets closed automatically
- Funding: Accumulated funding payments (positive or negative)
Step 6: Close Your Position
When you're ready to exit:
- Find your position in the Positions tab
- Click "Close" for a market close at current price
- Or set a limit close order at a specific price
- Confirm the transaction
Your realized PnL (profit or loss) is added to or subtracted from your Drift account balance.
Understanding Leverage Properly
Leverage is the most misunderstood concept in perp trading. Here's what actually happens:
2x leverage example:
- You deposit $100 USDC
- You open a 2x long SOL-PERP position: $200 notional value
- SOL goes up 10%: Your position gains $20 (20% return on your $100 margin)
- SOL goes down 10%: Your position loses $20 (20% loss on your $100 margin)
- Liquidation at roughly -45% move (varies by protocol and maintenance margin)
10x leverage example:
- You deposit $100 USDC
- You open a 10x long SOL-PERP position: $1,000 notional value
- SOL goes up 10%: Your position gains $100 (100% return on your $100 margin)
- SOL goes down 10%: Your position loses $100 (100% loss — you're liquidated)
- Liquidation at roughly -9% move
The math is straightforward: higher leverage means smaller moves can liquidate you. For beginners, 2-3x leverage gives you meaningful exposure while providing a buffer against liquidation.
Funding Rates Explained
Funding rates are the mechanism that keeps perp prices in line with spot prices. They're critically important for anyone holding positions for more than a few hours.
How it works:
- Every hour (on most Solana protocols), a small payment is exchanged between longs and shorts
- If the perp price is above the spot price (more longs than shorts), longs pay shorts
- If the perp price is below the spot price (more shorts than longs), shorts pay longs
- The rate is proportional to the deviation between perp and spot prices
What this means for you:
- In strong uptrends, funding rates can be very positive — holding a long costs money even if price stays flat
- During peaks of bullish sentiment, funding rates of 0.05-0.1% per hour aren't unusual — that's 1.2-2.4% per day
- Shorts can actually earn income by collecting funding during bullish periods (but they're short, so the directional risk offsets this)
Practical tip: Always check the current funding rate before opening a position. If funding is 0.1% hourly and you're going long, you'll pay roughly 2.4% per day just to hold the position. That's a significant drag on profitability for swing trades.
You can view funding rates on each protocol's interface:
- Drift: Shows current and historical funding on each market page
- Zeta: Displays funding rate next to each perp pair
- Flash Trade: Shows funding rate in the trade panel
Risk Management for Perp Trading
Perp trading without risk management is gambling. Follow these rules to protect your capital:
Set Stop Losses
Every position should have a stop loss — a price at which you automatically exit to limit losses.
On Drift: Use the "TP/SL" (take profit/stop loss) feature when opening a position. Set your stop loss at a level where the loss is acceptable to you — typically 1-5% of your total trading capital per trade.
Size Positions Properly
The 1-2% rule: Never risk more than 1-2% of your total trading capital on a single trade. If you have $1,000 in your account, your maximum loss per trade should be $10-20.
This means adjusting both your position size and leverage so that your stop loss, if hit, only loses 1-2% of your capital.
Don't Max Out Leverage
Protocols offering 50x or 100x leverage doesn't mean you should use it. Even experienced traders rarely go above 5-10x. Higher leverage:
- Gives you a tighter liquidation price
- Amplifies the impact of temporary wicks
- Creates more stress and worse decision-making
- Makes funding costs relatively higher compared to your margin
Keep Reserve Margin
Don't use 100% of your deposited collateral as margin. Keep at least 30-50% as free margin. This gives you room to:
- Add margin to a position if it moves against you temporarily
- Open additional positions if opportunities arise
- Absorb funding costs without approaching liquidation
Track Your Funding Costs
For positions held longer than a few hours, funding costs are a real expense. Track them and factor them into your PnL calculations. A trade that shows +5% unrealized profit but has accrued -3% in funding is really only +2%.
Common Beginner Mistakes
Using high leverage on your first trade. Start with 2-3x. You can always increase later once you understand how liquidation distances feel in practice.
Not accounting for funding rates. A "free" carry trade can quietly drain your margin through hourly funding payments.
Moving stop losses. You set a stop loss for a reason. Moving it further away when price approaches it is the fastest way to turn a small loss into a large one.
Averaging down on a losing leveraged position. Adding to a losing perp position increases your risk. If the trade idea was wrong, exit. Don't double down.
Ignoring liquidation price. Always know exactly where your liquidation price is and how much buffer you have. Temporary wicks can trigger liquidations even if price quickly recovers.
Trading without a plan. Before entering any perp trade, know your entry, stop loss, take profit, and position size. If you can't define all four, don't trade.
Next Steps
Once you're comfortable with basic perp trades, explore:
- Advanced order types: Trailing stops, reduce-only orders, post-only limits
- Basis trading: Exploiting differences between perp and spot prices
- Funding rate farming: Strategically collecting funding during extreme sentiment
- Cross-margin: Using multiple positions' collateral efficiently
- Delta-neutral strategies: Combining spot and perp positions to eliminate directional risk while earning yield
Start small, learn the mechanics with real (but small) money, and scale up only when you consistently manage risk well. Jupiter for spot trading and Drift for perps is a solid starting combination for any Solana trader.
Browse all Solana perpetual protocols on MadeOnSol's DeFi directory.
