The Genesis of a Game-Changing Concept: How a Hong Kong Hike Revolutionized Crypto Trading

In 2015, during a hike in Hong Kong, the concept of the perpetual swap, also known as a perpetual future or 'perp,' was conceived. Ben Delo, a mathematician and co-founder of BitMEX, was discussing a problem that had been plaguing him for months with his friend Bavik, a derivatives trader. BitMEX had been experimenting with various futures contracts, including quarterly, monthly, weekly, 48-hour, and 24-hour contracts, but none of them were working as intended. Customers were complaining that their positions were closing without warning, and they wanted a product that resembled spot trading but offered the leverage of a derivatives exchange. Delo asked, 'What if a future never expired?' Bavik's response was immediate: 'Mathematically, it would be worth infinity.' Although technically correct, this idea presented a challenge. The solution involved charging traders the bitcoin overnight rate, similar to the LIBOR in traditional finance. However, Delo soon realized that this rate did not exist, prompting him to create it. This innovation led to the development of one of the most significant financial products of the 21st century. The story of BitMEX's inception and the creation of the perpetual swap is a testament to the power of innovative thinking and the importance of understanding customer needs. The company's journey, from its humble beginnings to its current status as a major player in the crypto trading world, is a fascinating tale of perseverance, creativity, and determination.