The Genesis of a Revolution: How a Hong Kong Hike Paved the Way for a Crypto Trading Breakthrough

The concept of the perpetual swap, also known as a perpetual future or 'perp,' was conceived in 2015 on a hiking trail in Hong Kong. Ben Delo, BitMEX co-founder and mathematician, was discussing a problem with his friend Bavik, a derivatives trader. BitMEX had been experimenting with various futures contracts, but customers were consistently complaining about their positions being closed without warning. They desired a product that resembled spot trading but offered the leverage of a derivatives exchange. Delo posed a question: what if a future never expired? Bavik's response was that it would be worth infinity from a mathematical standpoint. However, he suggested charging traders the bitcoin overnight rate to address this issue. The problem was that this rate did not exist at the time. Delo decided to create it, which ultimately led to the invention of one of the most significant financial products of the 21st century. The story of BitMEX's journey, from its inception to the creation of the perpetual swap, is a testament to innovation and the power of solving real-world problems.