Dhruba Basu

So it's clear from the debates and discussion on this post that crypto derivatives (mainly perps) product design and market structure that surrounding it remain the biggest problem the industry need to tackle before it can grow to the next level in a sustainable manner. The industry simply cannot go through this level of wealth destruction event every once in a while and we pretend things are fine without fixing the structural problems. That said there is a hope that we can hopefully build a better product looking at the history. The March 2020 market meltdown where BTC fall 50% to 70% in hours are very similar to 10th Oct for altcoins where system outage on leading price discovery venue exacerbate the downward movement, however what make things worse were the fact that those perps were quanto perps which means BTC perps are collateralized by BTC not stablecoins thus you get the extreme reflexivity on the downside and there's just very little way you can hedge this quanto perp exposure. Most market participants recognize this product design flaw and combined with the fact that stablecoins been growing in usage, the market share of quanto perps on Bitmex move from >80% to less than 20% in one year and by the mid of 2021, most people are using USDT margined BTC perps and not BTC margined quanto perps anymore. The collective decision for the industry to use USDT margined perps have definitely improve the resilience of market structure significantly and we get less volatility for BTC as time goes by. I am looking forward to a new product design to emerge that is significantly better than the current iteration of crypto perps.

Nice subtweet, even better lack of nuance that perps are different to onchain IOUs with no governance rights. Perps are a derivative contracts on the underlying spot reference price. Trading spot equities is virtually free for retail traders on any reasonable brokerage. The costs are and spreads are ZERO. The people arguing for tokenization makes NO sense. With a gun in my mouth I trade HOOD on an AMM with huge fees and huge spreads. Not to mention risk of wrench attack/losing my assets.

This pardon now clears Binance, the largest crypto exchange in the world, to buy a US crypto company and any potential regulatory licenses as a way of entering the US market.