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Perpetual Swaps for EOS, Litecoin, and Polkadot announced by Bitfinex

Photo of: Dennis Ramos
by Dennis Ramos

Bitfinex became the newsmaker and this time for a new launch. The Bitfinex derivatives today made an announcement about the launch of perpetual contracts for EOS, Litecoin, and Polkadot. 

As per the press release, trading went live on Bitfinex on 12 October at 9:00 AM UTC. This contract reinstates that every contract will promise users to gain from a 100x leverage which will be settled in Tether (USDT). The new development and launch were welcomed by many in the community. CTO Paolo Ardoino stated:

“We’re delighted to announce the addition of EOS, Litecoin, and Polkadot to the growing portfolio of perpetual swaps available to trade on the exchange.”

Source: Twitter

What is it all about?

Ardoino believes that the introduction of such a product was important because investors and fund professionals have exhibited a lot of interest especially for hedging purposes and of course for managing fees. Bitfinex presently has 10 listed concurrent derivative products and the introduction of these will become an addition to this much-touted list. Out of this the Europe 50 and Germany 30 perpetual swaps which were launched last month to offer the required exposure and leverage in traditional equity markets. 

The move was put forth in order to widen the scope of investment for cryptocurrency traders. The move will help them gain further exposure to traditional markets and to that CTO Ardoino further adds:

“High-frequency traders account for about 80% volume on our platform. We are attuned to their requirements and see this offering as being able to enhance cross-asset trading strategies”

Let’s understand Perpetual contracts

Before pushing further, let’s take a sneak peek at perpetual contracts. Technically speaking it is a special type of futures contract but compared to the traditional form of futures, it does not have an expiry date. So, one can obviously hold a position for as long as they like. Apart from this, the trading of perpetual contracts is based on the underlying index price. So, the index price is the composite of the average price of an asset as per the major spot markets and their relative trading volume. 

Understanding Bitfinex perpetual contract

Unlike traditional futures, perpetual contracts are traded at a price that is either similar or equal to spot markets. As per this platform, it is offering only 5 crypto-related derivatives products given below:

  • Bitcoin/Tether Pair
  • Ether/Tether Pair
  • Tether Gold/Tether Pair
  • Ampleforth/Tether Pair
  • Bitcoin Dominance Index

But with the addition of EOS, Litecoin, and Polkadot derivatives, it may mark as a much more professional and a grand entry into the crypto-derivative space for Bitfinex. 

Recently we reported that more than $26 million of Bitcoin stolen in the 2016 hack was moved across 7 different destinations. Bitfinex is considered to be the top 10 exchanges in terms of the daily trading volume and with such additions to its kitty which the investors find interesting, it might as well come to the top sooner.