Why Stablecoin Settled Bitcoin Futures Will Become the Most Traded Derivatives Contract
Crypto markets might have been lackluster lately but liquidity and volumes in crypto futures have not diminished. Crypto derivatives trading has been able to buck the trend seen in crypto spot trading by offering to traders the ability to take both long and short positions and the use of leverage to amplify trading returns. The strong demand for leveraged or margin trading has attracted dozens of new and old crypto exchanges into the futures trading domain.
However, most of the derivative exchanges are offering practically the same features and same future contracts. In this backdrop, Delta Exchange has begun to pull ahead of the pack with its continuous stream of innovations that address important problems being faced by crypto derivatives traders, viz:
- USD pairs are missing on most exchanges. Only Bitcoin trading pairs are available.
- Traders are required to put margin in Bitcoin
- Profits are calculated and paid out in Bitcoin terms only
In order to solve the above problems, Delta Exchange has launched Stablecoin futures which provide USD pairs and USDC settlement. USD pairs with up to 100x leverage are available for Bitcoin, Ethereum and Ripple. Traders are required to put margin in USDC for holding positions and their profits are also calculated in USDC.
Why this is game changing?
In a futures trade, margin acts as collateral required to hold a position. The profit/ loss from trade will either increase or decrease the margin. If the margin is kept bitcoin, then its dollar value is exposed to the price-risk of Bitcoin. Further profit or loss, which are also earned in Bitcoin terms, are exposed to Bitcoin price risk.
Most traders are used to tracking the dollar value of their portfolio. Hence, they need to take into account the increment or reduction in value of their position due to the change in the price of Bitcoin. Keeping margin and profits in USDC solves this problem and makes it simple for traders to evaluate their position.
Stablecoins are a big hit in cryptocurrency trading. USDT pairs against Bitcoin and Ether constitute to most of the volume in crypto trading globally, which is a testament to the inherent demand for stablecoins in crypto trading.
Delta Exchange is extending the same to crypto futures trading. The company believes that the introduction of USDC-settled futures will help expand the market and provide a major boost to cryptocurrency derivatives trading.
Incentives by Delta Exchange for Makers and Takers
The company is pushing its Stablecoin settled futures aggressively and is offering attractive incentives for traders and market makers. Delta Exchange is currently running a deposit bonus offer, under which they match deposits of their users 1-for-1 upto 0.01 BTC. Thus allowing traders, more capital to trade with and a reason to try the exchange. The company is also offering revenue share models for market makers and for those who refer customers to Delta Exchange.
About Delta Exchange
Delta Exchange is a marketplace for the trading of cryptocurrency derivatives. The exchange currently lists futures on bitcoin (BTC), ether (ETH), ripple (XRP) and stellar lumens (XLM), that allow up to 100x leverage. The founding team of Delta Exchange has worked with Wall Street firms like Citigroup and UBS and the founders have in the past has raised money from the likes of Softbank and Sequoia for their prior ventures.
It will be interesting how the market reacts to stablecoin futures and if Delta Exchange has cracked the secret to challenge the big fish in the crypto derivatives space.