DWF Ventures Explores Innovations in Perpetual DEXs Landscape

On October 11, 2023, DWF Ventures disclosed its primary investment focus on derivative protocols, particularly perpetuals, through a comprehensive Hindsight article. The piece aims to dissect the landscape of decentralized exchanges (DEXs) concerning perpetuals, shedding light on prevalent innovations in this domain.

The journey of perpetuals commenced with Bitmex introducing them in 2016. Since then, the growth trajectory has been striking, with perpetuals now embodying a whopping 97% of the crypto market trading volume. The burgeoning interest in perpetual DEXs underscores the discernible disparity between centralized exchanges (CEX) and DEXs, and the boundless growth potential inherent in perpetual DEXs.

A stark contrast exists between CEX and DEX, especially in terms of central limit order books (CLOB) and trading processes. The blockchain constraints have posed a substantial challenge in mirroring or outstripping the user-centric experience provided by CEX on DEX platforms.

Efforts are being channeled to create a decentralized “CEX experience.” Protocols like dYdX are at the forefront of replicating the Limit Order Book (LOB) model, while HyperliquidX is pushing the envelope in the decentralization spectrum.

In the vein of embracing DeFi innovation, perpprotocol emerged as a trailblazer by introducing the vAMM model. This model serves as a viable alternative for traders yearning for decentralization coupled with instant on-chain liquidity.

DriftProtocol has ventured into a hybrid approach to tackle the inherent limitations of on-chain LOB and vAMMs. This novel methodology involves routing orders through three distinct sources to achieve effective on-chain matching, bridging the gap between traditional order books and automated market makers.

A notable divergence is witnessed in the rise of Liquidity Pool (LP) models in perpetual DEXs. Spearheaded by GMX, the peer-to-pool model departs from the conventional vAMM model, providing a fresh perspective on liquidity management.

Kwenta.io is playing a pivotal role in revolutionizing the LP model by leveraging the Synthetix Debt Pool. This innovative tactic minimizes slippage by pooling and transferring liquidity across various markets, fostering a conducive environment for trading synthetic assets and perpetual futures.

The perpetual DEX landscape is ripe for continued innovation. The unique structural differences between DEXs and CEXs have spurred a wave of DeFi innovations, manifesting in models like vAMMs and liquidity pools. DWF Ventures expressed an anticipatory stance towards how each protocol would navigate the challenges and further mold the future of perpetual DEXs.

DWF Ventures’ discourse underscores the blend of decentralization and innovation as a driving force for perpetual DEX advancements. The continuous exploration and adaptation of new models signify a promising horizon for the perpetual DEX landscape, with each protocol contributing to a more robust and user-centric decentralized trading ecosystem.

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Cryptocurrency Firms Deny Exposure to Troubled US Banks

In recent years, the cryptocurrency industry has seen significant growth, with new exchanges, wallets, and other services popping up almost daily. However, the industry has also faced numerous challenges, including regulatory scrutiny, hacking attacks, and volatile market conditions.

The ongoing banking crisis in the United States is the latest challenge facing the industry. Several major U.S. banks, including Silicon Valley Bank (SVB) and Signature Bank, have been dissolved due to financial difficulties, leaving customers and partners uncertain about the safety of their funds.

To address these concerns, major cryptocurrency firms have taken to social media to assure their users that they have no exposure to the troubled banks and that their funds are safe and accessible.

Tether, the operator of the largest stablecoin by market capitalization, with a market value of $73 billion, was one of the first companies to deny exposure to SVB and other troubled U.S. banks. Tether’s chief technology officer, Paolo Ardoino, took to Twitter to announce that the stablecoin company has zero exposure to Signature Bank.

Similarly, Kris Marszalek, CEO of major cryptocurrency exchange Crypto.com, provided similar statements on the company being unaffected by the ongoing issues in U.S. banking.

Other major exchanges, including Gemini and BitMEX, have also denied any exposure to the dissolved U.S. banks.

Despite having a partnership with Signature, Winklevoss brothers-founded Gemini exchange has zero customer funds and zero Gemini dollar (GUSD) funds held at the bank, the firm announced on March 13.

BitMEX exchange also took to Twitter on March 13 to announce that the company had “no direct exposure” to Silvergate, SVB, or Signature, and that all user funds continue to be safe and accessible 24/7/365.

Exchanges like Binance and Kraken have partly denied exposure to the dissolved banks, with Binance CEO Changpeng Zhao stating that Binance does not have assets at Silvergate, and former Kraken CEO Jesse Powell also denying exposure to SVB.

Bitcoin mining firm Argo Blockchain issued a statement on March 13, declaring that the company has no direct or indirect exposure to SVB and Silvergate Bank. However, the company said that one of Argo’s subsidiaries holds a “portion of its operating funds in cash deposits” at Signature, which the company stated were secure and not at risk.

A number of other firms, including Animoca Brands, Abra, and Alchemy Pay, have partly denied exposure to the troubled U.S. banks, stating that they had no assets at SBV and Silvergate.

Some companies, like crypto custodian BitGo, declared that it holds no assets at SVB while being “not impacted” by issues at Silvergate, USD Coin, and Signature Bank.

In conclusion, the ongoing banking crisis in the United States has raised concerns among customers and partners of dissolved U.S. banks. However, major cryptocurrency firms have taken proactive measures to address these concerns and assure their users that their funds are safe and accessible despite the ongoing issues in the U.S. banking system. The response from the industry demonstrates its resilience and commitment to providing reliable and secure financial services to its users.


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BitMEX Co-Founder Proposes Bitcoin-Backed Stablecoin

Even if authorities are increasing their scrutiny of stablecoins, the community’s persistent interest in stablecoins that are not related to the U.S. dollar is illustrated by Hayes’ idea for the NakaDollar. NakaDollar would be a stablecoin that would not be tied to the dollar. The proposed stablecoin differentiates itself from major reserve-backed stablecoins such as Tether (USDT) and USD Coin by relying on derivatives markets that offer liquid inverse perpetual swaps rather than US dollar reserves as its backing mechanism. This is in contrast to major reserve-backed stablecoins such as Tether (USDT) and USD Coin. This stands in stark contrast to the two big stablecoins that came after it. These sorts of deals are referred to as “liquid inverse perpetual swaps” which is a fancy term for them (USDC).

The combination of short BTC holdings and USD inverse perpetual swaps would serve as the stablecoin that Hayes has suggested using as its underlying structure. In order to maintain the stablecoin’s 1:1 peg to the United States dollar, transactions based on mathematics would be conducted between the new NakaDAO and allowed parties and derivatives exchanges. These transactions would be necessary. The viability of the proposed stablecoin would be contingent on their being both the availability and the liquidity on derivatives markets to engage in the trading of inverse perpetual swaps. This is an essential prerequisite that must be met before the introduction of the stablecoin.

As the cryptocurrency industry continues its unyielding quest of perfection, it is virtually guaranteed that new concepts for stablecoins will emerge at some time in the near future. This might take the form of a new product or an improvement on an existing one. Yet, the regulatory framework that stablecoins operate under is also going through a period of transition. In light of this, it is of the utmost importance that stablecoin issuers make compliance and transparency their top priority in order to both attract investors and stay in line with the regulations that are now in place.


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BitMEX to Launch BMEX Token Trading on Friday

Crypto exchange Bitmex has announced it will launch the trade of its BMEX token on 11 November. 


As the company aims to regain market share in the derivatives space, Bitmex stated that the token would be used to reward users of its platform. The rewards will be allocated via trading fee discounts, withdrawal fee waivers, improved staking rewards, and access to new products and services on the Bitmex platform.

The token’s launch was initially announced in December of last year, and users started being airdropped with the BMEX tokens in February. According to the exchange, millions of tokens have been airdropped to over 80,000 traders since February. 

Just like other exchange tokens, such as BNB of the Binance exchange and FTT of the FTX exchange, the BMEX token is the digital currency issued by the Bitmex exchange. 

Though the BMEX tokens were expected to have launched earlier in June, the exchange chose to delay the launch citing unsatisfactory market conditions. However, Bitmex’s chief marketing officer Benjamin Usinger, later revealed that now is the right time to launch the token, and the exchange would like to contribute to growth in liquidity and revitalize the crypto markets. 

Bitmex will begin trading the BMEX token on Friday by first listing the BMEX/USDT pair on its recently launched spot exchange and then launching two new perpetual swaps — BMEXUSDT and BMEXUSD — on its derivatives platform.

While the exchange is preparing for the launch of its token, the company doesn’t still seem to be comfortable with the state of the market. Earlier this month, Bitmex decided to reduce its number of employees as part of a strategy to move away from the company’s “beyond derivatives” model.

“We are pivoting from our Beyond Derivatives strategy and will return much of our focus aiming at providing the crypto derivatives trading experience people will turn to,” stated Bitmex. The company added, “We are going to refocus on liquidity, latencies, and a vibrant derivatives community, including BMEX Token trading.”

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Bitmex to Layoff Employees a Week After CEO Takes Exit

Another top crypto exchange has decided to cut headcount a week after its CEO took an exit.

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Bitmex has reduced its number of employees as part of a strategy to move away from the company’s “beyond derivatives” model.

“We are pivoting from our Beyond Derivatives strategy and will return much of our focus aiming at providing the crypto derivatives trading experience people will turn to,” according to Bitmex. 

“We are going to refocus on liquidity, latencies and a vibrant derivatives community, including BMEX Token trading.”

The company’s “beyond derivatives” included a push into spot trading, brokerage and custody services.

Bitmex had employed around 180 people as of September.

Initially, it was reported that Bitmex had let go of 30% of the workforce, but they later clarified that the number was lower. However, the company has released not released an exact number.

The company had previously laid off around 75 jobs after cancelling its plan to take over the German bank Bankhaus von der Heydt.

According to the company statement, they are “going to refocus on liquidity, latencies and a vibrant derivatives community including BMEX Token trading.”

They further added that the company’s top priority is to make “sure all employees who will be impacted have the support they require.”

Bitmex became the first crypto exchange for offering crypto derivatives after its establishment in 2014.

The cut-off has come a week after CEO Alexander Höptner quit less than two years with Bitmex, following which the company appointed Chief Financial Officer Stephan Lutz as interim CEO.

Höptner was drafted to bail out BitMEX when the previous CEO Arthur Hayes was under investigation by the United States market regulators.

Höptner took over as CEO back in January 2021 at a time when the exchange needed enough stability and a break from the legal onslaught that was launched by US regulators over its derivatives products. Drawing on his experiences with Börse Stuttgart, Deutsche Börse AG, and led Euwax AG, Höptner committed to changing the primary focus of the exchange from derivatives to other products.

Besides Bitmex, other crypto exchanges such as Crypto.com and BlockFi have also laid off their employees.

Crypto exchange Crypto.com and lending platform BlockFi announced plans to cut over 400 jobs globally in June as they came under pressure from difficult market conditions.

Crypto.com said that it would reduce its workforce by 5%, which is about 260 employees. While BlockFi announced that it would lay off 20% of its workforce, around 170 people.

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BitMEX CEO Alexander Hoptner Resigns From the Trading Platform

Alexander Höptner, the Chief Executive Officer that was drafted to bail out the BitMEX exchange when Arthur Hayes was under investigation by the United States market regulators has announced, with immediate effect, his resignation from the exchange. 


First reported by The Block, the exchange’s leadership has been handed over to Chief Financial Officer (CFO) Stephan Lutz, a veteran who joined the exchange as a Partner at PricewaterhouseCoopers and took up the CFO role in May 2021.

“Stephan Lutz has been appointed as Interim CEO of BitMex after Alexander Höptner has left our business with immediate effect,” a BitMex spokesperson said in a statement, “Stephan will continue to serve as our CFO, a role he has held since May 2021.”

Höptner took over as CEO back in January 2021 at a time when the exchange needed enough stability and a break from the legal onslaught that was launched by US regulators over its derivatives products. Drawing on his experiences with Börse Stuttgart, Deutsche Börse AG, and led Euwax AG, Höptner committed to changing the primary focus of the exchange from derivatives to other products.

This push paid off under his watch as BitMEX launched its spot trading outfit back in May. With so many big shoes to step into, Lutz has also expressed optimism to help drive the trading platform’s growth, and with his more than a year of experience, he can be considered a suitable fit for the role.

“Together with the rest of the management team and our talented staff members, I will make sure that BitMex continues to deliver great, innovative crypto trading products and a secure and stable trading environment for our clients,” Lutz said in the emailed statement. “We want to thank Alexander for his support to the business during his tenure and wish him well in his future endeavours.”

Exchanges have continued to lose their top executives as outfits including Kraken, FTX, and NYDIG have seen the exodus of the top this crypto winter.

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BitMEX to Launch Platform Token BMEX by the End of 2022: CEO

The CEO of BitMEX said it would launch its exchange token BMEX by the end of this year.

BitMEX CEO Alexander Hoeptner announced the news in an interview at the Token2049 conference in Singapore.

BMEX, P2P crypto-products trading platform, was initially planned to be launched earlier. Still, BitMEX decided to postpone the launch of BMEX, considering the unsatisfactory market conditions at that time and hoped to allow BMEX to be launched in an environment where holders could get the best chance of return.

“Although we are ready to list BMEX, the present market conditions are not ideal, and we want to list the token in an environment that gives it the best chance to reward you, its holders,” the company said in a July announcement.

Alexander Höptner explained that the team would discuss whether there would be another “huge drop” in the future before evaluating the specific BMEX token listing time.

Just like other exchange tokens, such as BNB  of the Binance exchange and FTT of the FTX exchange, the platform currency is the digital currency issued by the platform itself.

Platform currency has more diversified value support than traditional assets such as Bitcoin. There are many application scenarios based on the exchange’s equity, such as its transaction and circulation value.

Therefore BMEX coin holders will be entitled to discounts on BitMEX transaction fees and other benefits.

In May, the U.S. Commodity Futures Trading Commission (CFTC) fined three BitMEX co-founders $10 million each for violating anti-money laundering (AML) requirements and received suspended sentences. The three companies failed to implement KYC processes for their U.S. customers, allowing their exchange to be an effective money laundering platform, processing up to $209 million in suspicious transactions, prosecutors said. Last August, BitMEX agreed to pay $100 million to settle years of civil charges it allowed illegal transactions and violated anti-money laundering rules.

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BitMEX’s Greg Dwyer Pleads Guilty for Role in Money Laundering Case

The first employee of BitMEX cryptocurrency derivatives exchange Monday pleaded guilty to violating a U.S. federal anti-money laundering law by failing to put in place an anti-money laundering program. The US Attorney for the Southern District of New York disclosed the announcement on Monday.

Gregory Dwyer, who previously served as the head of Business Development at BitMEX, pleaded guilty to violating the Bank Secrecy Act for failing to establish, implement, and maintain an anti-money laundering program at BitMEX.

Dwyer, a 39-year-old citizen of Australia and Bermuda, entered his plea before U.S. District Judge John Koeltl in Manhattan.

As per the plea agreement’s terms, Dwyer agreed to pay a fine worth $150,000 fine and is set to spend five years in prison as a penalty for his crime.

In a statement, U.S. Attorney Damian Williams said: “Today’s plea reflects that employees with management authority at cryptocurrency exchanges, no less than the founders of such exchanges, cannot willfully disregard their obligations under the Bank Secrecy Act.”

Dwyer accepting committed the above-mentioned crimes follows guilty pleas to the same charges by the crypto exchange’s three co-founders (Benjamin Delo, Arthur Hayes and Samuel Reed).

Prosecutors stated that from 2015 to 2020, Dwyer and BitMEX co-founders intentionally violated the federal Bank Secrecy Act by failing to adopt “know your customer” and anti-money laundering programs, thus turning the exchange into a money laundering platform.

In February, Delo, Reed, and Hayes admitted they had failed to “willfully failing to establish, implement, and maintain an Anti-Money Laundering (AML) program.”

In May, the US Commodity Futures Trading Commission (CFTC) fined the three BitMEX co-founders $10 million each for breaching anti-money laundering (AML) requirements and each was sentenced to probation.

Prosecutors alleged that the three failed to implement KYC processes for their U.S. customers, thus making their exchange an effective money laundering platform and processing up to $209 million in questionable transactions.

In August last year, BitMEX agreed to pay $100 million to settle civil allegations that it allowed illegal trades for years and violated rules requiring anti-money-laundering programs.

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BitMEX Lists Luna 2.0, ETH Margin and Settlement Options

Cryptocurrency exchange BitMEX announced on Thursday that it has expanded its margin trading services by listing the new Luna 2.0 token (LUNA) on its platform. Terra Luna launched the new cryptocurrency on 28 May.

BitMEX listed Terra 2.0 (LUNA) in a dedicated trading zone and opened trading for LUNAUSD and LUNAUSDT trading pairs at 04:00 UTC on 2 June 2022.

Terra 2.0 holds the maximum leverage of 25x for the users. Users are now able to trade XBT, and USDT margined Terra Luna 2.0 contracts.

LUNAUSD has a fixed Bitcoin multiplier, which lets traders go long or short on the listing without trading LUNA or USD. The LUNAUSDT product is a linear perpetual swap margined in USDT. Margins appear in XBT, and so do the earnings or loss from the trade.

Terra 2.0 is part of the revival plan introduced by Do Kwon, the CEO, and founder of Terra Protocol after the Terra protocol collapsed.

Besides that, BitMEX launched ETH options for margins and settlement for their perpetual and futures contracts, which also apply to the listings above. The service allows users to trade on leverage — margin trading lets users multiply their gains and losses.

BitMEX said that the leverage (the amount that can be borrowed against a user’s crypto collateral) is 25x. A customer’s margin wallet balance determines the amount of funds he or she can borrow, following a fixed rate of 25:1 (25x).

The introduction of ETH margin trading follows the launch of BitMEX Spot, which aligns with BitMEX’s focus on providing new, easy-to-use trading services for both existing and new users.

Founded in 2014, BitMEX is a Seychelles-based cryptocurrency derivatives platform that enables traders to buy and sell futures and perpetual on a wide range of cryptocurrencies.

In 2016, BitMEX launched perpetual leveraged swap contracts on Bitcoin to allow customers to trade Bitcoin futures with up to 100x leverage with no expiry date. As a result, the innovative new crypto derivative trading service helped BitMEX become one of the Bitcoin exchanges with the highest volumes in the world.

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BitMEX’s Daily Spot Exchange Trade Volume Hits $24m Record High

Less than 10 days after launching the spot trading option, crypto exchange platform BitMEX reached a new milestone by hitting a daily trade volume of $24 million recently. 

According to Alexander Hoptner, BitMEX’s CEO, the significant 24-hour trade volume illustrated a strong desire by institutional and retail investors to enter the crypto space.

Furthermore, the exchange’s first-time deposits and daily signup went through the roof, jumping by five times since the spot trading option was officially rolled out on May 17.

Hoptner pointed out:

“The influx of new BitMEX users and the trading volume reflects a strong appetite from institutional and retail traders and our long-term bullish views of today’s market environment.”

He added:

“ With the successful addition of Spot, BitMEX is in a strong position to further its expansion to introduce a wider array of offerings – on top of derivatives and interest-bearing products – to support traders around the world, bringing us closer to achieving global recognition of crypt as an asset class.”

BitMEX currently offers seven pairs of cryptocurrencies, including Bitcoin (XBT), Ethereum (ETH), Chainlink (LINK), Uniswap (UNI), Polygon (MATIC), Axie Infinity (AXS), and ApeCoin (APE), all against Tether (USDT).

To expand options in the crypto ecosystem, the exchange’s spot trading joins other strategies like interest-bearing products and derivatives.

Genia Mikhalchenko, the vice president at BitMEX spot, stated:

“We are very excited about the strong start to the launch of our spot markets and really appreciate the supportive feedback and positive responses from existing and new BitMEX traders. The numbers we are seeing internally in the first 10 days reinforce that our decision to go beyond derivatives was the right one.”

The exchange’s average daily value (ADV) also scaled the heights after hitting more than 3 million traded in the first week. 

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Bitcoin (BTC) $ 41,849.21 5.59%
Ethereum (ETH) $ 2,247.19 4.00%
Litecoin (LTC) $ 73.33 2.14%
Bitcoin Cash (BCH) $ 247.04 9.25%