The Genesis of a Trading Revolution: How a Hong Kong Hike Reshaped Crypto

The concept of the perpetual swap, also known as a perpetual future, was conceived in 2015 on a hiking trail in Hong Kong. Ben Delo, BitMEX co-founder and mathematician, was discussing a persistent issue with a friend, Bavik, a derivatives trader. Despite trying various futures contracts, including quarterly, monthly, weekly, and even 24-hour contracts, customers continued to express dissatisfaction with positions closing unexpectedly. They sought a product that resembled spot trading but offered the leverage of a derivatives exchange. Delo's inquiry, "What if a future never expired?" sparked a pivotal conversation. Bavik's response, "Mathematically, it would be worth infinity," highlighted the technical challenges. However, Bavik suggested charging traders the bitcoin overnight rate, akin to LIBOR in traditional finance, to address the issue. Delo decided to build this concept, laying the groundwork for one of the most influential financial products of the 21st century. The story of BitMEX's evolution and the invention of the perpetual swap is a testament to innovation in the crypto trading space.