Editors Note: This article comes fromHoneycomb Finance News (ID: fengchao-caijing), Author: Wendao, Editor: Wen Dao, reproduced by Odaily with authorization.
Editors Note: This article comes from
Honeycomb Finance News (ID: fengchao-caijing)
, Author: Wendao, Editor: Wen Dao, reproduced by Odaily with authorization.
Although both OKEx and Huobi respect each other as friends, in the contract trading market, the hostility towards each other has become stronger and stronger.
On August 14th, the day after Huobi disclosed that its contract trading volume and depth were the “No. The risk of premature liquidation in advance.
The contract market competition between the two major exchanges has become more and more obvious.
In the arena of contract trading, OKEx and Huobi are not the only contenders.
In addition to BitMEX, which has been focusing on perpetual contracts for 5 years, veteran exchanges such as Bibox, Gate.io, and newcomer Bitget also have contract areas. The bigger threat may come from another leading platform. In July this year, Binance made it clear that it intends to launch contract products.
The exchanges are very popular, and users are happy to see such a situation. The pin insertion incident that investors fear most has been alleviated on the platform side. This is the benefit brought by competition. The exchanges are constantly iterating on the user experience and risk control coefficient of contract products.
secondary title
Strong leveling standard dispute escalates contract war
Facing Huobis data of contract trading volume and depth ranking first in the world, OKEx cant sit still.
On August 14, this exchange, which has always had a high amount of holdings in the contract market, issued a suggestion early in the morning, pointing out that there was a problem of premature and early liquidation among friends.
The big V Baby Pig who showed his real trading on an App platform didnt like the term liquidation very much, It would be nice to use forced liquidation, but now every time it seems like we are going to burn the boat.
In the contract investment market that relies on judging the price trend to make profits, users often say liquidation is more rigorously called forced liquidation (forced liquidation) by the trading platform. When users participate in contract transactions, the margin invested is not enough When the deduction is made, the platform will forcibly close the users transaction behavior to prevent the loss from magnifying or even spreading to the entire market.
The margin rate is an indicator for users to judge when they will encounter a forced liquidation. OKEx questioned friends on this line. It believed that the high margin rate of some exchanges would cause users to liquidate their positions in advance, and compared its own standards with friends.
image description
OKEx took the BTC contract as an example to list the forced liquidation standards of each company
Li Bi seldom traded contracts on Huobi later, Every company has different standards. I will definitely choose the one with the lowest liquidation index.
Regarding the early liquidation problem pointed out by OKEx, Tom, the operation director of Huobi Futures, explained to Honeycomb Finance that each platform will set an adjustment coefficient based on risk control considerations. For users with high leverage and large positions, this coefficient will be higher. This is the consensus of all platforms, As far as the adjustment coefficient setting of BTC contracts of friends is concerned, in the case of 100 times high leverage, the adjustment coefficient is as high as 50%.
Tom believes that such a setting is not because the platform wants users to explode their positions in advance, but based on risk control considerations, The purpose is to prevent the overall user sharing problem caused by users with higher risk appetites breaking their positions.
secondary title
Huobi grabs delivery and OK expands sustainability
The confrontation of business standards triggered by the top spot in contract trading volume this time released a signal of an escalation in the battle for contracts. The mutual knock-off between the two leading platforms in the contract market has been going on for more than half a year.
On December 10, 2018, Huobi officially launched the delivery contract after two months of testing the contract product. Before that, this market share was almost exclusively occupied by OKEx, and the other half was BitMEX’s perpetual contracts.
At that time, there were two voices in the industry. Many users embraced the addition of Huobi. weaken.
There are also people who are not optimistic about the entry of Huobi. Contracts are different from currency transactions, and they have high requirements for system and risk control settings. Huobi just guards the spot market. Why bother to enter this high-risk muddy water. Some people in the industry even ridiculed , Huobi is here to share the pin worries for OK?
Looking back at the past, the two platforms have long clashed in the contract market.
In May 2017, OKEx focused on contract trading. In this market, it has unique technical support and first-mover advantages. The technical partner of the exchange, OKCoin, has entered the contract market since 2014. .
In the last era of competition, the 796 exchanges that focused on futures contracts fell. At that time, Huobi also had a bayonet called BitVC, which ended on September 4, 2017.
Until the second half of 2018, the market went down, and the trading volume of tokens shrank as a whole. The contract trading market, which relies on price trends to hedge risks, became an important supplement for investors in the currency circle. Noticing this, start to layout contract transactions.
A new round of competition between the two leading platforms has kicked off again.
Looking at the contract announcements of the two exchanges, in the first half of 2019, Huobi continued to improve the basic functions and rule upgrades of its own delivery contract products, including stipulating the rights and interests of major customers, launching the entrustment function of online plans, and increasing the upper limit of user positions.
image description
During the same period, OKEx, which was relatively complete in terms of functions, was fighting a defensive war on the delivery contract while expanding its territory on the perpetual contract.
Among them, in terms of trading contracts, the exchange will focus on the improvement of risk control, including launching the mark price system, adjusting the index composition of currencies, opening the gradient margin mode, injecting risk reserves, etc.; The frequency of contract announcements is quite high. In January alone, 9 of the 15 announcements related to contract trading categories were related to perpetual contracts, and the direction focused on enriching assets, marketing activities, and function enhancements.
Not long after the contract trading volume data was disclosed, there was also news that Huobi would launch a perpetual contract. It was almost a race against time, and the two leading platforms were running furiously on the contract track.
secondary title
It’s really impossible not to run. In the arena of contracts, these two are not the only players.
Previously, there was BitMEX, which has been focusing on perpetual contracts for 5 years. Later, there were old players Bibox and Gate.io who quietly became fans in the exchange field, followed by a newcomer Bitget who wanted to use the contract as the cornerstone of the city of Rome. .
Another leading exchange with more strength is also eyeing the contract market. On July 2 this year, Binance CEO Changpeng Zhao officially announced the launch of futures contracts at the ASIA BLOCKCHAIN SUMMIT 2019 (Asian Blockchain Summit 2019) held in Taipei. Binance’s official announcement also disclosed a screenshot of the contract transaction interface.
image description
The contract transaction page disclosed in the Binance announcement
Zhao Changpeng revealed that Binance’s contract trading will initially only provide BTC/USDT trading pairs with a maximum leverage of 20 times, and then add more trading pairs to increase leverage.
The exchange’s deployment of financial derivatives is quite rapid. On May 8 this year, it released a currency-to-currency leverage trading service, and launched the official product on July 11.
Users also have expectations for Binances contract transactions. In the Binance community, almost every month there are people who inquire about when the contract will be launched.
At the beginning of this year, Binance took a relatively cautious attitude towards contract transactions. Judging from the public speeches of the exchange’s co-founder He Yi, it is an important reason why users risk the platform’s caution.
Regarding this growth point, He Yi expressed it more directly in a community sharing, We also did not expect that friends and merchants made so much money by relying on contracts.
Leveraged derivatives are added to asset returns and investment risks, and the transaction fees contributed are also magnified by leverage. Any player with traffic will not miss this market.
Binance is always the number one player in the global currency trading volume rankings. Sometimes the capital changes of Bitcoin on Binance are even taken as a signal of market changes, and the contracts are based on mainstream currencies. The main asset, the entry of Binance, is a threat to OKEx and Huobi.” An exchange practitioner commented.
secondary title
Users love competition
The exchange is in full swing, and users are happy to see such a competitive situation, OK used to be dominant, now there is Huobi, and in the future Binance. The contract investor Uncle Chasing Wind bluntly said that with competition, industry rules will tend to be more reasonable .
In the past, the OK family was the only one in the delivery contract, enjoying exclusive profits and user criticism. It was almost impossible to use users to promote change, because there was no other place to play except his home. Li Bi later discovered that, Huobi entered the game to share profits, and there were more criticisms. In the past, things like downtime and pin insertion began to appear on Huobi.
The competition has made the two platforms care more and more about user experience, and the speed of product iteration is getting faster and faster. Taking OKEx as an example, according to the statistics of Honeycomb Finance, the number of announcements related to contract products in the eight months of this year has exceeded the amount of the whole year of last year, and the number of event announcements under special market conditions has also decreased.
However, many contract users also said that at present, the competition of platforms has not yet entered the stage of making profits to users, and is still in the competition for limited traffic and transaction volume, and no one has reached the position that can establish industry authority and standards.
In the view of Uncle Chasing the Wind, the current liquidation system of the two platforms is more or less a 50-step laugh at a hundred steps, and in the end, the remaining money of the user after the forced liquidation is charged into the risk reserve of the exchange Li said, “Now there are huge amounts of coins in the risk reserves of these two exchanges, and at the same time, there has been no liquidation for several months. Is it possible to consider returning the customer’s remaining funds after the liquidation if the risk reserve is sufficient? currency? Instead of continuing to charge up to the risk reserve.”
In addition, the most important transaction depth in contract transactions is also the most concerned issue for users. Contract trader Frog explained that the most intuitive manifestation of transaction depth is whether the pending order can be quickly executed when the pending order is particularly large. In addition, whether the large order will affect the current price after the transaction.
Experienced investors are skeptical about the contract trading volume and transaction depth disclosed by various exchanges.
Trading volume is not equal to the real transaction, the actual transaction volume is an important indicator of depth, and contract trading volume is almost a routine operation of exchanges, but the disclosure of such watery data will give traders who have just entered the platform It causes a lot of confusion, thinking that depth is good. In fact, whether depth is good or not, users will know once they experience it.”
image description
Perception of exchange trading volume drawn by a contract user
The above-mentioned investor gave an example, For example, I list 2,000 contracts on exchange A, and I can eat it in seconds; I also list 2,000 contracts on exchange B, and the amount of the robot is listed there. It will be sunk in the sun, and the bigger the money, the more obvious it will be.
A large contract user who requested anonymity said that at present, when holding thousands of contracts worth tens of thousands of dollars on Huobi and OKEx, the depth can meet normal trading needs; assets worth hundreds of thousands of dollars, OKEx experience Better; if there are more, the depth of the two is not good.
At the moment when there is no neutral third-party statistics, the contract trading volume and transaction depth of the exchange seem to be still in the stage of talking to itself.
