The Bitcoin mini perpetual contract is aimed to replicate the underlying bitcoin spot market but with flexible leverage. The contract has no expiration date, and is designed to closely track the underlying reference Price Index via Funding Rate mechanism.
Currently, KuMEX supports XBTUSDM perpetual contract trading with Bitcoins. The XBTUSDM contract is quoted in USD, and denominated in Bitcoin. The underlying price is Bitcoin Spot Index. This Index is the volume-weighted average US dollar price of Bitcoin in 6 exchanges including Coinbase Pro, Bitstamp, Kraken, Gemini, Liquid and Bittrex. The weight will be rebalanced quarterly. Pnl calculation and margin are denominated in Bitcoin as well.
Traders who buy the contract will make a profit from an increase in the Bitcoin/USD price, and the sellers will be profitable if the Bitcoin/USD price drops.
For example, a trader goes long 5 XBT at the price 5000 USD. He is long 5 * 5000 = 25,000 Contracts. After a few days the price climbs to 6000 USD. The traders profit will be: 25,000 * 1 * (1/5000 - 1/6000) = 0.8333 XBT. Similarly, if the trader goes short in the first place, he will lose 0.8333 XBT in the end.