AMA Recap: Huobi Perpetual Swaps
Launched in December 2018, Huobi Futures is a digital asset derivatives trading platform that provides secure, professional, and efficient crypto derivatives service for users. Huobi Futures now offers futures and perpetual swaps to cater for different market needs, and is going to launch Options in early September.
Covering mainstream tokens, Huobi Futures now offers 27 perpetual swaps including DeFi-token KNC, LINK & BAND, as well as 13 futures with types cover weekly, bi-weekly, quarterly and bi-quarterly. Through unremitting effort, Huobi Futures has been the world-leading crypto derivatives platform in terms of trading volume and liquidity.
Today Tom Wong, the COO of Huobi Futures, comes to the Huobi Futures official telegram to answer Huobi Followers’ questions and introduce future plan.
Guest Speaker Introduction
Tom Wong, COO of Huobi Futures
Tom 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 is the COO at Huobi Futures and becomes a crypto derivatives pioneer by introducing VIP Client Sharing Program aiming to lower users’ switching costs (Futures: bit.ly/VIPsharingFutures / Swaps: bit.ly/VIPsharingSwaps), which was modeled later on across the industry.
(Questions collected from Twitter)
Q1: What is Huobi Futures’ plan for global expansion? How do you get users and develop partnerships? (Akıllı @PhamHuo01951923)
Global expansion has always been one of Huobi Futures’pursuing goals.
As a crypto derivatives exchange, it is vital for us to build brand awareness and to attract new users. New markets mean both opportunities and challenges for us.
There are some of our actions below:
1. Product development: To satisfy user’s growing trading needs, we listed new perpetual swaps trading pairs. As of today, 27 perpetual swaps including BTC, ETH, EOS, LINK, BCH, BSV, LTC, XRP, ETC, TRX, ADA, ATOM, IOTA, NEO, ONT, XLM, XMR, XTZ, DASH, ZEC, KNC, ALGO, ZRX, VET, THETA, DOGE and BAND are available and more will be available soon.
2. Activities: We hold various activities to engage our users and attract new ones. Huobi perpetual swaps competition is live during 8.11–8.24, and now registration phase open: users who enrolled in the competition can get a giveaway. The grand prize Porsche and over 20,000 HT are waiting for winners. Join now:
Q2: Huobi Futures has its own position in the market. How does Huobi Futures plan to stay competitive compared to other projects? (Akıllı @PhamHuo01951923)
Liquidity, product development and risk control are the most important things to an exchange.
1. Liquidity: 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 45 days after its launch.
2. Product development: Our product and system are optimized frequently according to user’s needs. For example: Huobi Futures was the first that launched taker & follow a maker function to simplify order placement process and we optimized API limit to ensure the best trading experience.
Besides, a couple of milestone products are planned to be launched in the year, including options and USDT-margined perpetual swaps.
3. Risk Control: Building a stable and reliable system is our goal. Owing to the robust risk management capability, no calwback happened ever before, so that users can always receive full profit they earn. What’s more, we are the first in the industry to offer real-time settlement service of BTC, ETH, LTC futures and swaps, which significantly improves user’s fund utilization.
Q3: What’s the difference between Spot, Leverage trading, Futures, and Perpetual Swaps? (Akıllı @PhamHuo01951923)
Each product has unique characteristics. There is always a product on Huobi that suits you best.
Spot trading does not support leverages. Users benefit only from the rise in price;
Leverage trading supports leverages. Users benefit from both price rise and fall with only comparably small principals than spot trading. At the same time, interest is charged for the borrowed funds;
Without the need of borrowing assets before trading, Futures and perpetual swaps are derivatives that both support leverages (up to 125x on Huobi) and bi-directional trading (Long / Short).
Though Futures and Perpetual swaps are derivatives, they are a little different::
1. Expiry: Perpetual swaps do not have delivery while Futures have;
2. Settlement: Perpetual swaps settles every 8 hours while Futures settles on each Friday on Huobi;
3. Funding Mechanism: To anchor swaps price to the spot price, perpetual swaps users pay or receive funding based on funding rate and position direction at the settlement time.
Q4: At Huobi, do you make provision funds to avoid risks or negative impacts that make the market fluctuate sharply? If yes, how will the fund be operated? (Nguyễn Thị Huyền Trang @thihuyen93)
Huobi Futures has insurance funds specific to each coin, which is a critical protection method that helps us to maintain zero-clawback since launch.
Before each new derivatives trading pair goes live, we prepare an initial insurance fund to lower users’ risks. For example, before BAND perpetual swaps live today, 6,500 BAND has been prepared as an insurance fund.
We ensure users that clawback will never be triggered as long as the insurance fund is positive.
You can check the real-time insurance fund balance here: https://futures.huobi.fm/en-us/swap/info/fund/.
Q5: What is the use-case of Huobi Token (HT) in perpetual swaps? (Krt @Aman_krt)
Huobi Futures has been integrated into HT ecosystem. 20% of Huobi futures, perpetual swaps, and the upcoming options’ revenue will be used in the HT monthly burn. Besides, HT futures or perpetual swaps is also within our scope of consideration. Please stay tuned.
Q6: Can you briefly say how the Huobi Perpetual Swaps system is designed to be stable and reliable for Swap/Futures traders, even in volatile times? (AirLion @Trung34566)
System performance and risk control are vital to derivatives exchanges, which to a large extent determine how far it can reach. Huobi has 7 years’ experience in providing crypto trading service and has never been hacked.
In terms of risk control, price limit, order limit, and position limit are applied to prohibit market manipulation. Partial liquidation and locked margin mechanisms are adopted to reduce the user’s liquidation risk.