Huobi Futures
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Huobi Futures

AMA Recap: DASH x Huobi Futures

As of 12:00 on May 12, 2020 (GMT+8), the 24h trading volume of Huobi coin-margined perpetual swaps hit over $5.47 billion,outperforming that of BitMEX ($5.22 billion), reaching world first rank.

On June 4, Huobi/BitMEX volume maintained at 100.2%, showing the great potential of Huobi Futures. Many institutional investors and individual investors may curious why Huobi Futures can succeed in such a short time.

Launched in December 2018, Huobi Futures aims to provide the most secure, professional, and efficient crypto derivatives service to users with the strongest risk control and advanced instruments.

Huobi Futures offers futures and perpetual swaps to cater for different market needs. Covering mainstream digital assets, Huobi Futures now provides 13 kinds of perpetual swaps including Dash.

On June 5, 2020, Huobi Futures COO Tom Wong was invited as the guest speaker of AMA hosted by Dash official telegram group to share Huobi Futures with the community.

Guest Speaker Introduction

Tom Wong is the COO at Huobi Futures. He was a serial Entrepreneur before joining Huobi Group. After years of technical experience in Huawei, he started his journey in the blockchain industry first as a miner in Thunder and later moved onto starting businesses of his own. Currently, he takes the full range of operation and marketing as COO at Huobi Futures and becomes a crypto derivatives pioneer by introducing the VIP Client Sharing Program which was modeled later on across the industry.

Q1: I am only a basic crypto trader, what can derivative products bring us outside the scope of spot trading?

A1: From my perspective, crypto derivatives trading is more flexible than spot trading.

The differences between them include:

1. Derivatives trading supports open long and open short positions that enable investors to take profit regardless if the trend is moving up or down; while spot traders can only get benefited from the price rising.

2. Derivatives trading supports various leverages (futures up to 20x, swaps up to 125x) which amplify price fluctuation, while spot trading does not support such leverages.

3. Derivatives can be used to hedge against spot risks according to user’s needs. For example, if a miner forecasts BTC price will go down in future, he can open BTC short positions to cover the risk.

Q2: What can you recommend to new users who do not have much experience in futures trading? What functions are the most recommended for new starters?

A2: I highly recommend that new users master the basic underlying principles before entering the crypto derivatives market. Get ready quickly by watching Huobi Futures video tutorials:

Then try to trade futures with few dollars first. Besides, I suggest to manage your cost and profit smartly by using trigger order to stop loss and take profit.

Q3: Huobi Futures has really been doing well, could you be kind enough to let us know the relationship between Huobi Futures and Dashpay?

A3: Dashpay is an excellent project with a large fan base. It has been so glad to get connected with Dashpay and listed DASH perpetual swaps with leverages up to 75x on Huobi Futures in April. We are also looking forward to have further cooperation with Dashpay in the future.

Q4: What is the fundamental difference between Futures Contracts and Swaps?

A4: Similar to futures, perpetual swap is a kind of derivatives instruments which users can hedge against potential risks in spot market as well as arbitrage to earn profits. There are some distinctions between futures and perpetual swaps:

1. Expiry Date

Perpetual swaps have no expiry date so investors can hold the position without the time limit as long as liquidation is not triggered.

2. Funding Mechanism

Funding mechanism is the core difference between perpetual swaps and futures. Perpetual swaps investors will pay or receive funding based on funding rate and position direction at the settlement time, perpetual swaps require funding mechanism to anchor its price to the spot price, and it occurs every 8 hours along with the settlement.

3. Settlement

Perpetual swaps settle every 8 hours (3 times a day), respectively at 4:00, 12:00, 20:00 (GMT+8). After each settlement, users can withdraw their realized profits. (Except BTC and ETH perpetual swaps which are supported with real-time settlement)

Q5: What types of derivatives are available of Huobi Futures as of now?

A5: Currently, we provide futures and perpetual swaps.

9 kinds of futures with expiry type of weekly, bi-weekly and quarterly: BTC, ETH, EOS BCH, BSV, LTC, XRP, ETC, TRX are available.

13 kinds of perpetual swaps: DASH, BTC, ETH, EOS BCH, BSV, LTC, XRP, ETC, TRX, LINK, ADA, ZEC are available.

What’s more, Huobi options is going to be launched soon. By that time, we will provide lots of preferential activities and policies for users. Please stay tuned.

Q6. How does Huobi futures protect speculators from major losses in derivatives? What are the risk control mechanisms?

A6: Owing to the robust risk management capability, Huobi Futures maintains zero clawback record since launch. We are also the first in the industry to offer real-time settlement service for futures and perpetual swaps.

List pat of risk control methods:

1. Mature Risk Management mechanism: price limit, order limit and position limit are adopted to prohibit from market manipulation, which has already been in place since the futures contracts launch.

2. Mature Liquidation Mechanism: partial liquidation with zero liquidation fees charged.

3. Insurance fund specific to each coin: Huobi Futures ensures clawback will never be triggered as long as the insurance fund is positive.

Q7: On Huobi futures, how is the price at $DASH swap calculated?

A7: To ensure the accuracy and to reduce the possibility of price manipulation, Huobi Futures adopts a weighted average based on the latest transaction prices of multiple exchanges on the market, and calculates the index price.

The DASH swap price on Huobi Futures is composed by the DASH/BTC price from Huobi, Okex and Binance (33.3% each respectively).

Index price helps to make price manipulation barely impossible to achieve: manipulate multiple exchanges prices simultaneously needs a huge amount of funds, making price sudden change and recover less likely to happen; thus helps to improve users’asset safety on Huobi Futures.

Q8: What are the benefits provided by Huobi futures with traders who trade their assets on DASH?

A8: Supporting DASH perpetual swaps with up to 75x leverage, Huobi Futures also has following benefits for traders:

1. Huobi Futures has no clawback and no downtime since launch.

2. Huobi Futures has been the world top crypto derivatives platform in terms of volume and liquidity. Our coin-margined perpetual swaps volume exceeded that of BitMEX in only 43 days after launching. You can check the crypto derivatives volume at statistics websites such as CoinGecko or Cryptorank.

Source: CoinGecko. 15:30 on June 5 (GMT+8)

3. Attractive policies: preferential policies such as VIP Sharing program aiming to lower users’ switching cost

4. User-friendly trading environment: 7×24 customer support with point-to-point service.

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Huobi Futures is the leading trading platform for cryptocurrency derivatives market, which supports contracts margin trade with leverage.

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Huobi Futures

Huobi Futures

A Leading Digital Asset Derivatives Exchange under Huobi Group

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