Deribit, the Bitcoin futures and options exchange, has announced that it is launching the Deribit Perpetual, a trading product that tracks the Bitcoin price. Deribit’s trading platform is able to handle thousands of order requests per second with a transaction speed of around only a few milliseconds per order.
The Perpetual allows traders to take positions without exchanging any Bitcoin, features low fees, and allows traders to take large positions with only a small capital outlay. At the moment it is a single product at a single exchange but still responsible for between 40 and 50 percent of total global Bitcoin trading.
The Deribit Perpetual provides traders with:
- Low Fees: Charging just 0.075% on market orders
- Fast trading: Executing transactions in a few milliseconds
- Stability: Making continuous payments to keep the price of the Deribit Perpetual close to the Bitcoin price
- High Leverage: Traders can take up to 50x leverage in Beta and up to 100x leverage at the launch
- Fair Liquidation: Ensuring that the closing out of a leveraged trade does not hurt more than it has to.
If the price moves against a leveraged trade, a position will eventually need to be liquidated to ensure there is always enough capital leftover in the account to cover any losses. A number of high profile incidents have resulted in large losses for traders. Deribit has designed a fair liquidation mechanism that continuously tries to bring the position back into compliance by closing the position on an incremental basis. If the position is closed out customers receive any collateral that is left over.
The Deribit Perpetual executes ‘funding payments’ between the buyers and the sellers of the contract to keep the price of the Perpetual close to the Bitcoin price. Instead of making funding payments that are paid once every 8 hours and that cause bumps in the price around the time of the interest payment, the Deribit Perpetual makes tiny payments on a millisecond basis completely avoiding price disturbances.
The Deribit Perpetual is launched in beta. After its official launch, other cryptocurrencies like ETH and BCH will follow shortly after.
The Deribit team is extremely proud of the Deribit Perpetual,” said Deribit CEO, John Jansen. “We expect its execution speed, transparent pricing and fair leverage mechanics will satisfy the growing number of traders demanding ever more professional products.