As if BitMEX did not already have enough competitors trying to replace it as the top cypto derivatives exchange in the world, here's one more: Coinbase-backed BLADE is ready to offer up to 150X leverage for trading perpetual swaps on Bitcoin and altcoins once it is launched (in around three weeks).
The BLADE website defines perpetual swaps (aka "perpetuals") as financial derivatives, similar to futures, that enable traders/investors/speculators/hedgers to easily long and short cryptocurrencies with leverage." It says they are named this way since "they never expire and they are classified as swaps because payments are 'swapped' between counterparties on a periodic basis." They "represent the price of a perpetual claim on an index (e.g. the BLADE ZEC/USDT index)."
BLADE further says that trading perpetuals is similar to trading the underlying cryptocurrencies, but has two advantages: leverage; and a simple mechanism for shorting.
Perpetuals have the following two advantages over expiring futures:
- there is no need to roll over futures contracts "from the front month to a further-out month"
- they trade at prices very close to spot due to "periodic payments which close the gap (or basis) between perpetuals prices and underlying index prices"
BLADE offers both regular/vanilla perpetuals as well as inverse perpetuals: the former are "simpler contracts in which P&L is denominated in the quote currency," while the latter are "more complex contracts in which P&L is denominated in the underlying currency."
What Makes BLADE Unique
BLADE says that it is "the only cryptocurrency exchange dedicated to perpetuals." It offers leveraged trading (up to 150X) on the following pairs (with more to be added in the future):
- vanilla perpetuals
- XRP to USD Tether (XRP/USDT)
- Binance Coin to USD Tether (BNB/USDT)
- Zcash to USD Tether (ZEC/USDT)
- Monero to Bitcoin (XMR/BTC)
- Dogecoin to USD Tether (DOGE/USDT) - Vanilla Perpetuals
- inverse perpetuals
- Bitcoin to US Dollars (BTC/USD)
- Bitcoin to Korean Won (BTC/KRW)
Just like BitMEX, BLADE does not accept fiat currency: margin, profit-and-loss, and settlement are all done in crypto (USDT and BTC).
BLADE's Founders and Investors
According to a report by Techcrunch, BLADE was founded by Jeff Byun and Henry Lee, and it has raised $4.3 million in seed funding from a host of investors, including Coinbase, SV Angel, A.Capital, Slow Ventures, Justin Kan and Adam D’Angelo.
The BLADE CEO told Techcrunch that perpetuals are “arguably the fastest growing segment of cryptocurrency trading.”
To avoid trouble with U.S. financial regulators, BLADE is "an offshore entity with a U.S. subsidiary," and it does not allow U.S. investors/traders to use its platform. Instead, the main focus is on the "bifurcated" East Asia market. Here is Byun explaining what he means:
Either you have exchanges like Coinbase or Gemini or Bitrex that cater to the U.S. market that are highly regulated or the exchanges that cater to the non-U.S. market that are much less regulated, but that’s where most of the volume is.
Featured Image Courtesy of Blade Holdings, Inc.