In 2015, a hike in Hong Kong's mountains marked the birth of the perpetual swap, a concept that would transform the landscape of crypto trading. Ben Delo, BitMEX's co-founder and a mathematician, was on that hike, grappling with a problem that had been plaguing him for months. BitMEX had tried various futures contracts, but customers kept complaining about positions closing unexpectedly.
They wanted a product that combined the benefits of spot trading with the leverage of derivatives, but without the hassle of expiring contracts. Delo's conversation with his friend Bavik, a derivatives trader, led to a breakthrough: what if a future never expired? The answer was not straightforward, but it sparked an idea that would become one of the most influential financial products of the 21st century.
The perpetual swap was born, and with it, a new era in crypto trading. The product's impact was profound, attracting institutional attention and paving the way for traditional finance regulators to take notice. Today, the perpetual swap is a staple of crypto markets, with a turnover of $40-50 trillion annually, and its influence is expected to extend into traditional finance, revolutionizing the way we trade.