It all began in 2015 when Ben Delo, co-founder of BitMEX, embarked on a hike in Hong Kong with a friend, Bavik, a derivatives trader. Delo had been grappling with a problem: finding a solution to the frustrations of BitMEX customers whose positions were closing without warning.
The conversation that ensued led to the inception of the perpetual swap, a concept that would go on to revolutionize crypto trading. The idea was simple yet ingenious: a futures contract with no expiry date, tied to the spot price through a daily funding rate. This innovation allowed traders to speculate with leverage, while also providing a mechanism for hedging.
The perpetual swap was launched in May 2016, and its impact was immediate. By 2017, BitMEX had become the most liquid bitcoin market, with the perpetual swap at its core.
The product's success was not limited to BitMEX; it soon became a staple of the crypto derivatives market, with other exchanges adopting similar models. Today, the perpetual swap is a cornerstone of the crypto industry, with a daily turnover of billions of dollars. The story of the perpetual swap is a testament to the power of innovation and the importance of listening to customers. It is a reminder that even the most complex financial products can be born from simple conversations and a willingness to challenge conventional thinking.