Contango v1
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What are expirables?


An expirable is a derivative contract to buy or sell an asset at a specific date and price in the future. It’s called a derivative because it derives its value from the underlying asset.
  • If the expirable price is higher than the spot price of the underlying asset, the market is in contango (that's us! 💃).
  • If the expirable price is lower than the spot, then the market is in backwardation.
In TradFi, forwards are traded on many different assets such as currencies (EUR, USD, etc.) or commodities (wheat, oil, etc.), either for speculation or for hedging purposes. In crypto, forwards are normally traded on cryptocurrencies (BTC, ETH, etc.) on standardised products called futures. See the use cases section for more details.
Just like in TradFi, forward contracts on cryptocurrencies have:
  • a price at which they can be bought and sold.
  • an expiry date, at which the underlying asset is exchanged between the parties (physical delivery).
When buying or selling forwards, traders can make use of leverage, i.e. borrowed capital to make trades. Leverage allows traders to amplify their buying and selling power, but it also increases the risks of liquidation.


Let’s say the spot price of ETH in January 2022 is
S=100S = 100
The sentiment is optimistic so the market is currently in contango: the forward price of ETHDAI is
F=110F = 110
A trader believes the price of ETHDAI will go up over the next few months. So she buys (goes long) 1 ETHDAI March 22 forward contract, at
F=110F = 110
In March, at expiry, the trader will receive 1 ETH for the original price paid of
110DAI110 \:DAI
, regardless of the ongoing spot price
If, as expected, ETHDAI appreciates even more to
S=120S = 120
​ and the 1 ETH is sold for DAI then she makes a profit of
10DAI10 \:DAI
If, on the contrary, ETHDAI goes to 100 then, by selling the 1 ETH, she realises a loss of
10DAI10 \:DAI

Forward vs Futures contracts

As we like to say internally: all futures are a forward, but not all forwards are futures.
Forward and futures are both derivative contracts to buy or sell a specific asset at a set price by a certain date in the future. A forward contract settles just once at the end of the contract and has specific terms (e.g. on Contango the price of an expirable depends on the amount of collateral a trader uses to buy or sell a contract). However, futures contracts are standardized contracts. As such, they are settled on a daily basis. These arrangements come with fixed maturity dates and uniform terms.

So what’s unique about Contango?

Contango is the first exchange to offer expirables using fixed interest rates protocols. This is possible thanks to DeFi. Contango is permissionless, decentralized and composable.
Check out the next section to see why we need expirables and why Contango is the market leader in the space.