# Perpetual exchange

## 1. What are perpetual contracts?

Perpetual contracts are futures contracts without an expiry date. A regular futures contract is generally purchased with the expectation that the underlying physical goods can be delivered upon expiration. With perpetual contracts, there is no expiry date (and hence no expectation of physical delivery), meaning that these contracts are purchased for the sole purpose of speculation and hedging.&#x20;

## 2. What type of perpetual exchange is Zona?

Zona is an oracle-based AMM exchange that allows users to trade synthetic assets. Zona operates similarly to GMX or Gains Network, where liquidity providers deposit funds into a vault or liquidity pool that acts as a counterparty to traders.&#x20;

<figure><img src="https://1459145712-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F7ahBG74qgSNVUFLp9ZYl%2Fuploads%2FpzHoGpTeZFSObqFB3BJd%2F3_perps.png?alt=media&#x26;token=2d3b5fbc-671e-471a-9b1e-1c3240150d65" alt=""><figcaption><p>Liquidity providers act as as counterparty to traders on Zona</p></figcaption></figure>

## 3. Why a perpetual exchange instead of fractionalized real estate?

As a perpetual exchange that allows users to long or short housing prices of a city, Zona provides broad exposure to the entire market rather than just specific properties.

In contrast, fractionalized real estate only offers exposure to the specific properties that have been tokenized. Investors still face losses if those properties underperform while the broader market rises (i.e., the property is in a bad neighborhood or near a crime scene).

Perpetual exchanges also offer better liquidity and lower regulatory hurdles than both traditional and fractionalized real estate.

## 4. What about air quality?

Given that air quality is not a tangible real-world asset, the tokenization of air quality presents a great challenge. However, almost all cities in the world have stations that monitor and record air quality on a regular basis. Using this granular and real-time data, we are able to create air quality indexes that track the average air quality of a region and how it changes over time. The Zona perpetual exchange is the natural avenue for users to speculate on or to hedge against the air quality trends via our indexes.

[<br>](https://x.com/zona_io/status/1844005387252740343)
