The Crypto Trading Revolution: How a Hong Kong Hike Changed Everything

In 2015, a hike in Hong Kong's countryside led to the creation of the perpetual swap, a groundbreaking financial instrument that would go on to revolutionize the world of crypto trading. Ben Delo, a mathematician and BitMEX co-founder, was on that hike, discussing a problem that had been plaguing him for months with his friend Bavik, a derivatives trader. BitMEX had been experimenting with various types of futures contracts, but customers were consistently complaining about positions closing without warning. Delo and Bavik brainstormed a solution: what if a future never expired? The idea was born, and Delo set out to build it, inventing one of the most influential financial products of the 21st century in the process. The perpetual swap was launched in May 2016, and its impact was immediate. By 2017, BitMEX had become the most liquid bitcoin market in the world, with the perpetual swap at its core. The product's success was due in large part to its innovative funding rate mechanism, which allowed market makers to anchor the swap's price to the spot price of bitcoin. Today, the perpetual swap is a staple of the crypto derivatives market, with every major exchange offering its own version. The product's influence extends beyond the crypto world, with traditional finance regulators taking notice and considering how to incorporate perpetual swaps into their frameworks. For Delo, the perpetual swap's success is a testament to the power of innovation and the importance of listening to customers. As the crypto market continues to evolve, it will be exciting to see how the perpetual swap and other financial products like it shape the future of trading.