How a Chance Encounter on a Hong Kong Hike Revolutionized Crypto Trading

The concept of the perpetual swap was born out of a problem that had been plaguing BitMEX: customers were frustrated with positions closing without warning due to expiring futures contracts. Delo's hiking companion, a derivatives trader named Bavik, suggested removing the expiry date, but this would make the contract's value infinite. Bavik proposed charging traders the bitcoin overnight rate to solve the issue, but such a rate did not exist at the time. Undeterred, Delo built the rate himself, laying the foundation for one of the most influential financial products of the 21st century. The perpetual swap, launched in 2016, allowed for a futures contract with no expiry date, anchored to the spot price through a daily funding rate. This innovation enabled traders to speculate with high leverage, transforming the crypto trading landscape. As the product's popularity soared, BitMEX became the most liquid bitcoin market in the world, with the perpetual swap at its core. The exchange's success attracted competitors, who soon copied the concept, and today the perpetual swap is a staple of the crypto derivatives market, with a turnover of over $40 trillion annually. The product's impact extends beyond the crypto space, with traditional finance regulators taking notice and considering its integration 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' needs.