Perpetual Contract Markets exist on the dYdX Perpetual Contracts Protocol. They are synthetic trading markets on Ethereum that allow for exposure to arbitrary liquid assets using ERC-20 tokens as collateral.
Similar to existing perpetual contracts, the price of the contract is tethered to the price of the underlying asset by a dynamic interest rate. An on-chain price oracle is used for liquidation purposes (and secondarily for interest payments). The order book for the market is off-chain, allowing for faster price movements and better liquidity.
Importantly, the contract’s underlying asset does not have to already exist as a token. For each account trading the perpetual, profits and losses are exchanged using the collateral ERC-20 token. This effectively allows users to trade assets that do not actually exist on Ethereum as long as a sufficient price oracle exists. For example a BTC–USDC perpetual contract can exist as long as a BTC–USDC oracle exists. Only USDC would be used as margin deposit for all parties; tokenized BTC is not required.