A perpetual has no expiry to force convergence, so it needs an external reference for what the asset is worth. That reference is an index, usually a weighted composite of several spot exchanges.
Funding is computed against it, and the mark price that decides your margin is derived from it. So the index is doing more work in your position than the venue’s own last trade.
Why it is a composite
Because a single-venue reference is manipulable. Move one thin book and, if that book set the index, you would move margin and funding across the entire venue. Averaging across exchanges makes that prohibitively expensive — you would have to move all of them at once.
Most venues also drop outliers, so one exchange printing wildly away from the others is excluded rather than averaged in.
Where the construction bites
The constituent list differs by venue. Two exchanges’ perpetuals on the same coin can have slightly different indices, which is one reason their funding differs — the argument in why funding should never be blended.
A constituent can break. If an index exchange has an outage or its own liquidity event, the index inherits it. This is the mechanism by which a problem at a venue you have never used reaches your position.
Stablecoin denomination. Constituent prices are usually quoted in a stablecoin, so a depeg makes the index itself ambiguous.
What to actually do
Read which venues make up the index for the contract you trade, and note whether any of them is thin. And when the venue’s own price departs visibly from the index, treat that as a liquidity signal about the venue — the same read as a persistent gap in where the price is actually made.