The evolution of the contract algorithm sickle: ten years of renewal

Author:danny

On March 12th, 2020, Arthur Hayes of BitMEX made a decision against the ancestral but saving the world - cutting off the network of his server (aka unconnected). According to the public announcement, it was “attacked by DDoS”. But what is the truth

THE TRUTH IS, THERE'S ONLY $20 MILLION LEFT IN THE ORDER BOOK, AND THERE'S $200 MILLION PENDING LIQUIDATION. IF THE NETWORK CONTINUES, THE BTC CONTRACT PRICE WILL BE HIT TO ZERO BY THE LIQUIDATION ENGINE ITSELF。

At that moment, the entire encrypted contract market was only a few minutes away from the systemic collapse。

ALL THE PRECISION MECHANISMS THAT SEEM “FORTUITIVE” TODAY — TAGGING PRICES, STAIRWELLING, U-STANDARDS, PORTFOLIO BONDS — WERE ALL REWRITTEN AFTER THAT MOMENT。

Introduction: a vision of 20 years' sleep

In 1993, Robert J. Sheller proposed a strange derivative scenario - no maturity, no physical delivery, price anchoring through external data sources, with multiple parties paying each other at some rate. He wanted to use it to hedge against liquidity risks in the real estate market. In those years, it was a classic "academic grace, engineering impossibility" product: The conventional financial clearing infrastructure is too old, the regulatory framework too rigid, and no exchange is willing to touch a “never-ending” contract。

The idea was in the ivory tower for 23 years。

On May 13, 2016, BitMEX dug it out of the old pile of paper, poured bitcoin fuel and lit it。

ON THAT DAY, THE XBTUSD CONTRACT WENT LIVE, AND NO ONE REALIZED THAT IT WOULD SWALLOW 93% OF THE ENTIRE ENCRYPTED MARKET IN 10 YEARS. IT WAS MORE LIKE A TECHNICAL EXPERIMENT -- A 100-FOLD LEVER TOY FOR A BUNCH OF NON-MORTEM PREDATORS. BUT IT'S THIS TOY, WHICH HAS GONE THROUGH HUNDREDS OF CRISES, SILOS, MANIPULATIONS, WEAPONIZED RULES AND PATCHES OVER THE NEXT DECADE, WHICH HAS EVOLVED INTO A GLOBAL PRICING MACHINE THAT HANDLES NEARLY $200 BILLION IN TRAFFIC PER DAY。

This article wants to answer a specific question:How did every gear of this machine grow

The answer was not drawn by engineers on the whiteboard. Each gear stands behind a specific disaster。

Chapter I Genesis: original offence of pricing three sets and currency (2016-2018)

The engineering of Hiller's vision

There is only one fundamental challenge for a lasting contract: there are no “compulsory points” without expiry dates. Traditional futures are bound to revert to spot prices on the date of delivery, but the price will be reduced to purely speculative drift without the design of a dedicated anchoring mechanism for a lasting contract。

The solution given by BitMEX consists of three pieces that bite each other3 sets of pricing:

Index prices: The trade-off weighted average of many external spot exchanges is the “physical anchor” of the system as a whole. It is designed to assume that even if bad money can contaminate a single data source, it is difficult to pollute all data sources simultaneously。
Mark price: IS THE “LIQUIDATION ANCHOR”. IT IS BASED ON INDEX PRICES, SUPERSEDING AN EMA SMOOTHED CURRENT BASE:

Mark price = Index price + EMA (Basis)

THE FLAT ENGINE ONLY RECOGNIZES THE PRICE. THE TRANSIENT “PLUGGING” ON THE PLATE WILL BE SMOOTHED BY EMA AND WILL NOT BE TRANSMITTED TO A LIQUIDATION DECISION — THIS IS THE CENTRAL MECHANISM FOR FIGHTING “PLUGGING”。
Funding rates: “gravity” for the return of contract prices to index prices:

F = P + Clamp (I - P, -0.05%, +0.05%)

of whichPIt's a premium indexI..is the fixed interest rate component (0.01 per cent). When the contract went upFIn order to be positive, many people pay for the empty head and raise the cost; the water is put on the reverse. BitMEX was initially set to settle every eight hours, with a single cap of 0.75 per cent。

The three sets look simple and elegant, but each of its parameters contains an implicit assumption. A fixed interest rate of 0.01 per cent reflects the economic judgement that “the holding of a stable currency has a small interest rate advantage over holding an encrypted asset” — which is also the source of the effects of the famous “Structural anchor” in BitMEX. 8 The hourly settlement cycle is the compromise between face-to-face liquidity and server computing capability. ±0.75% cap is a relatively conservative estimate of “extreme deviation”。

These assumptions are established when markets are stable. But markets are never stable in the long run。

The double-edged sword of the inverse contract

THERE IS A REAL LIMIT TO THE EARLY AND LASTING CONTRACT: THE STABLE CURRENCY IS NOT YET MATURE. USDT FLOWS WERE JUST OVER $2 BILLION AT THE BEGINNING OF 2018, FAR FROM SUPPORTING THE DEMAND FOR COLLATERAL IN THE DERIVATIVES MARKET. DEALERS HAVE ONLY BTC, AND THEY CAN ONLY USE BTC AS SECURITY。

THIS LED TO THE CREATION OF THE “CURRENCY-INVERSE CONTRACT” - THE CONTRACT IS PRICED AT USD, BUT BOTH THE BOND AND THE BTC ARE SETTLED. ITS YIELD FORMULA IS NON-LINEAR:

PNL (BTC) = Contractors x (1/ Entry-1/ Exit)

IN THE CATTLE MARKET, MORE PEOPLE ATE BOTH THE PROFITS OF THE CONTRACT (BTC INCREASES) AND THE APPRECIATION OF THE BTC ITSELF, CREATING A DOUBLE MULTIPLIER -- THE ENGINE OF THE EARLY CREATION OF COUNTLESS MYTHS. HOWEVER, THE SAME SOURCE OF GAINS AND LOSSES: IN THE CRASH, THE CONTRACT LOSSES AND THE DEPRECIATION OF THE BOND WERE RESONATED TO FORM A “DEATH SPIRAL”. A 10-FOLD LEVERAGE, 10% DOWN AT THE BTC, NOT ONLY DID THE CONTRACT FALL 100%, BUT THE MONETARY VALUE OF THE BOND SHRUNK SIMULTANEOUSLY BY 10% -- DOUBLE-STRUNG, AND THE CLEARING ENGINE TRIGGERED MUCH FASTER THAN THE THEORETICAL MODEL。

(Note: Currency vs U: Destiny of the same warehouse position — 10x leverage for BTC, 10% price drop)

This loophole was magnified in 2020, but it really scared the market for the first time in August 2018。

First lesson: 50,000 BTC from OKEx and Social Callback

On 3 August 2018, the BTC quarterly delivery contract of OKEx (now OKX) showed a huge multi-heading position of approximately 50000 BTC (approximately $360 million at the time). The holder of the warehouse apparently had serious problems in judging the course of events — the BTC price fell all the way down and finally touched its clearing line. I'm sorryReference: OKEx Adolescence Process BulletinI'm not sure

The wind control system of OKEx faced a dilemma at that moment:

Market value liquidationIT MEANS THROWING 50,000 BTC BILLS INTO A FEW HUNDRED MILLION DOLLARS DAILY DEPTH. THIS CAN BREAK THROUGH THE ORDER BOOK IN AN INSTANT, LEADING TO A MUCH LOWER LIQUIDATION PRICE THAN THE BANKRUPTCY PRICE (THE LOSSES ARISING FROM THE DIFFERENCE IN THE BANKRUPTCY PRICE ARE BORNE BY THE EXCHANGE) AND, THROUGH A CHAIN REACTION, TRIGGERS A WAVE OF SMALL AND MEDIUM-SIZED SILOS。
No liquidationIt means breaking rules and shaking the credibility of the system。

OKEx finally chose the standard tool in the industry at the time -Socialized ClawbackThe loss of the system as a result of this huge warehouse was distributed pro rata to all traders who made a profit this week. During that week, a large number of empty traders earned money and then watched as their account profits were cut proportionately by the exchange。

Community reaction is anger。

THE PROBLEM WITH THIS MECHANISM IS THAT IT SHIFTS THE RISK FROM THE “ADVENTURER” TO THE “INNOCENT”. A TRADER WHO MADE MONEY OUT OF ETHBTC, COULD HAVE BEEN CUT OFF FOR A BTC BOMBHOUSE THAT HAD NOTHING TO DO WITH HIM. THIS IS CONTRARY TO THE MOST BASIC ETHICS OF THE TRANSACTION: YOU ARE RESPONSIBLE ONLY FOR YOUR OWN DECISIONS。

This event directly contributed to three reforms in the sector:

Include storage limit (Position Limited)I don't know. The risk of a single user holding a hold that cannot exceed a certain proportion of the capacity of the mouth load — the “large but not fall” — is cut from the source。
A sufficiently large risk reserve pool (Insurance Fund) has been established to absorb warehouse losses rather than being distributed to users。
- It's a really good part of the storyOKEx was forced to give up socialization and switch to a programme that had been invented and validated by Huobi a few years ago: the Automatic Warm Reduction System (ADL)。

Here is a historical detail that is often overlooked:ADL wasn't invented by Bitmex. It was invented by fire coin。As early as 2014-2015, coins of fire (along with the then OkCoin) have dominated the futures market for encrypted money. It was during that period that the flint coin designed an automatic reduction method based on the ranking of “profit percentage x effective leverage” in order to address the fair distribution of losses in the pipeline. In 2016, when BitMEX launched the XBTUD contract, its ADL mechanism was to directly replicate the design of the fire coin and add some fine-tuning -- This is explicitly recognized in BitMEX’s own official blog (Adapt or Die, 2025):

"We shared the Huobi ADL mechanism but made a few adjustments."

THE ESSENTIAL DIFFERENCE BETWEEN ADL AND CALLBACK IS THE ACCURACY OF THE ALLOCATION OF LOSS. RECALL IS A BIG MEAL, AND ALL THOSE WHO MAKE MONEY SHARE IT EQUALLY. ADL IS BASED ON A SORTING ALGORITHM OF PRECISION GUIDANCE:

Ranking score = PNL %/ Effective %

Only the accounts of the opponents “using maximum leverage and earning maximum profit” will be forced to flatten and use their profit sheets to take over the bankruptcy orders of the bomb warehouse users. Common traders with low leverage and low profitability are not affected。

(Note: Socialized callback vs ADL: Two principles of allocation of loss in the same silo crisis I'm not sure

Until 2018, BitMEX and the coin had already adopted ADL. Only OKEx insisted on using a simpler, rough socialized callback -- until the 50000 BTC slot pushed the entire system to the brink of collapse and it was forced to turn to ADL afterwards. So, the callback was completely swept into history。

One of the most instructive aspects of this history is that in the history of encryption derivatives, the most critical innovation in the settlement mechanism was done by a Chinese exchange before BitMEX invented the contract for renewal. BitMEX has a historical status as an inventor of a lasting contract, but one of the key wind-control gears that can survive a lasting contract, the real inventor of which is a coin of fire。

Insurance fund: first line of defence for warehouse losses

BUT ADL IS NOT, AND SHOULD NOT BE, THE FIRST MECHANISM FOR ALLOCATION OF LOSS. THE ESSENCE OF ADL IS TO “COERCIVELY LEVEL THE POSITIONS OF THE EARNER” IN EXTREME CIRCUMSTANCES — AN UNINVITED INTERVENTION FOR A LONG-TERM PROFITABLE TRADER. A HEALTHY WIND CONTROL SYSTEM SHOULD HAVE A CUSHION TO ABSORB LOSSES BEFORE ADL IS TRIGGERED。

This cushion is calledInsurance FundI don't know。

The core logic of the insurance fund is quite concise — it uses a structural “dividend” in the liquidation process. When the user slot is fixed, the clearing engine must dispose of it in the market at current prices. However, the clearing price of the exchange is not the same as the price (insolvency price) for which the user account is zero. There is a premium between the two:

Insuance fund inflow = liquidated price - bankrupt price

To give a specific example: a 100x lever with a warehouse at BTC = $50,000. When the BTC fell to $49,500 (about - 1 per cent), the maintenance bond of the account ran out, but the liquidation engine at $49,600 was forced to take over. The account's bankruptcy price was $49,500, and the liquidated price was $49,600 — the difference of $100 in the middle, which was not refunded to the user (the user has already been “zero”), nor to the exchange's profit statement, but was fully injected into the insurance fund。

THIS MECHANISM BRINGS WITH IT A DELICATE STRUCTURAL BALANCE: IN MOST NORMAL SITUATIONS, LIQUIDATED USER SLOTS ARE SOLD AT A PRICE HIGHER THAN THE INSOLVENT PRICE WHEN THE MARKET IS SUFFICIENTLY LIQUID, AND THERE IS A CONSTANT FLOW OF FUNDING TO THE FUND. FUND SIZE SNOWBALL ACCUMULATION. WHEN EXTREME EVENTS OCCUR AND THERE IS A DEFICIT IN THE WAREHOUSE, THE FUND ADVANCES, AND THE PROFIT-MAKING USERS SIMPLY NEED NOT FEEL THE SHORTFALL. ADL WILL ONLY BE TRIGGERED IF THE FUND IS COMPLETELY DEPLETED AND IS STILL INSUFFICIENT TO COVER THE LOSSES OF THE WAREHOUSE。

This is the three-tier defense system common to modern encrypted derivatives exchanges。

The first layer is thick enough to touch very little; the second layer is precise enough to make everyone all right. Modern mainstream CEX (Binance, OKX, Bybit, Bitget, etc.) insurance funds are usually kept in the order of hundreds of millions to billions of dollars - enough to absorb the vast majority of silos. According to publicly available data, the Binance Contract Insurance Fund was maintained at a long-term level of $500-$800 million at the beginning of 2026; the Bybit USDT Sustainable Insurance Fund was maintained at over $400 million。

Another dimension of insurance funds — transparency tools。Since changes in the balance of the insurance fund directly reflect the market's “frequency of extreme liquidation events”, the head exchange (Binance, OKX, Bybit) will publicly present the historical curve of the insurance fund. The curve of fund balances is, in a sense, the barometer of the health of the clearing engine of the exchange. An increasing fund balance means that liquidation is fluid and infrequent; a sharp drop exposes the liquidity gap experienced by the liquidation engine in an extreme situation。

History reviews:

2015-2017:The early exchanges (BitMEX, OKCoin, Flame) have each introduced the prototype of insurance funds, but on a smaller scale。
OKEx 50000 BTC incident 2018:For the first time, the insurance fund was systematically discussed in the industry - if OKEx had already established a sufficiently large insurance fund at that time, the $400 million deficit could have been absorbed by the fund and there was no need to initiate socialized recovery. After this event, the insurance fund was recognized by the industry as essential infrastructure。
2019-2020:The head exchange has published insurance fund data as a sign of transparency。
12 March 2020 (312):The insurance fund received the ultimate stress test. On that day, Binance, Bybit's insurance policy nettifies tens of millions of dollars, but on a sufficiently large scale, successfully absorbs most of the deficit and avoids a massive ADL trigger -- This was one of the most critical of the “uneven catastrophes” in 312。
FTX CRASH 2022:REVERSE. FTX'S “INSURANCE FUND” HAS LONG BEEN SUSPECTED OF BEING A FICTIONAL NUMBER, AND ITS REAL SIZE IS FAR FROM SUFFICIENT TO COVER ITS CONTRACTUAL RISK EXPOSURE AND ULTIMATELY FAILS TO ACT AS A BUFFER IN THE EVENT OF A COLLAPSE。
2024-2026:The size of the insurance fund has become one of the dimensions of the “hard power” competition between head exchanges, some of which have even opened verifiable addresses of fund balances on the real-time chain。

THE INSURANCE FUND LOOKS LIKE A LITTLE PATCH FOR FINANCIAL ENGINEERING, BUT IT'S A KEY POSITION IN THE LASTING CONTRACT WIND CONTROL SYSTEM - IT IS THE GEAR THAT TRANSFORMS “LIQUIDATION” FROM A DISASTER AT THE USER LEVEL TO A CONVENTIONAL EVENT THAT CAN BE ABSORBED AT THE SYSTEM LEVEL. THERE IS NO INSURANCE FUND, AND EVERY SETTLEMENT IS A DIALOGUE WITH ADL; WITH THE INSURANCE FUND, THE VAST MAJORITY OF LIQUIDATIONS ARE FULLY TRANSPARENT TO OTHER USERS。

It also explains a seemingly confusing phenomenon: why the size of the liquidation of a contract for the continuation of encryption has been maintained at hundreds of millions of dollars a day, and the scrambling of the silos by the diaspora, which never led to a substantial collapse in the market as a whole. The answer is hidden in a buffer that is rarely mentioned。

CHAPTER II ADULT COURTESY OF THE LIQUIDATION MECHANISM: 312 AND BIRTH OF U (2019-2020)

From the whole barn to the steps

By 2018, the logic of clearing almost all exchanges had been extremely harsh — once the maintenance of the bond line had been touched, all the warehouses of the entire account had been flat at market prices。

This raises two systemic issues. One is over-liquidation: a large household holding $10 million in warehouse space may just need 2 million to get out of the danger zone, but the system smashes out all 10 million without discrimination. The 8 million other “over-liquidation” is not only unfair to users, but it also creates a huge exposure shock. The second is the cascade effect: the market price bill generated by the large household silo broke through the door, triggered more small and medium-sized warehouses and formed a waterfall collapse。

Partial Liquidation is the engineering solution to this problem. Its core idea is to segregate the silos in nominal terms, each of which corresponds to a different level of maintenance security:

When liquidation triggers, the system flattens a portion of the warehouse and reduces the remaining nominal value of the account to a lower level, thereby benefiting from a lower maintenance margin. If security has been restored to the account as a result of the reduction, liquidation will cease and the user retains the remaining slots. This liquidation model significantly reduces the probability of over-liquidation and cascade collapse。

Bybit and Binance took the lead in making this mechanism universal around 2019. But it's not until March 12th, 2020。

"312": THE BAR MITZVAH FOR A LASTING CONTRACT - THE CURRENCY HAS SHIFTED TO THE U

On March 12th, 2020, the new coronary outbreak went out of control and the crude oil price battle triggered a global panic sale. Bitcoin was cut off from about $7,800 to $3800 in a matter of hours, the biggest drop in a single day。

The disaster revealed a triple systemic flaw in the derivative market at the time。

First, the counterproductive collapse of the currency contract。THE BULKY USED BTC AS A MULTI-BTC CONTRACT, AND WHEN CURRENCY PRICES FELL, THE CONTRACT LOSSES WERE RESONATED WITH THE DEPRECIATION OF THE BOND, AND THE CLEARING ENGINE WAS TRIGGERED AT AN ACCELERATED RATE. IT'S NOT ABOUT A FEW PEOPLE, IT'S ABOUT THE WHOLE MARKET STRUCTURE. – IN EXTREME DECLINE, CURRENCY-BASED CONTRACTS ARE NATURALLY DYNAMICALLY ACCELERATING THEIR OWN COLLAPSE。
Second, liquidation cascades and panic retreats。When hundreds of millions of positions were taken over by the system, a large number of market bills were dumped. Marketers are directly withdrawing from the unilateral demand for liquidity — not a technical problem, but a business rational: a bilateral offer in a free-falling market is tantamount to suicide. After the liquidity was drained, the BitMEX contract price was once $500 lower than Coinbase's spot price. This means that even the anchoring of “marked and indexed prices” may fail in extreme circumstances。
Third, bottlenecks in the bottom public chain network hinder arbitrage rehabilitation。The current price difference of $500 should have been wiped by the arbitrager in a few minutes -- chaining BTC to BitMEX to do more, and emptying Coinbase and locking in risk-free profits in a few minutes. But that day, the ETA Gas Fee soared up to hundreds of Gwei, and the Bitcoin network was heavily blocked. The arbitragers see the difference, but cannot complete the transfer. Network bottlenecks at the physical level stifle self-rehabilitation at the financial level。

At the most desperate moment, the BitMEX order book had only about $20 million to buy, but faced more than $200 million in outstanding settlement bills. If no intervention is made, the contract price will be hit to zero。

BitMEX chooses to be physically detached - forced to detached on the grounds of “hit by DDoS”. The net prevented an almost certain systemic collapse. It also marks the end of the era of Bitmex as the leader of the industry。

INSTITUTIONAL LEGACY: FULL TAKEOVER OF U-BASED CONTRACT

After 312, the industry made an absolute choice:The government is not going to be able to make a difference。

U-LINEAR CONTRACTS (USING USDT OR USDC AS A BOND AND SETTLEMENT UNIT) HAVE RAPIDLY EMERGED. ITS REVENUE FORMULA IS A SIMPLE LINEAR RELATIONSHIP:

PNL (USDT) = Contractors x (Entry-Exit)

THE BOND ASSET WITH THE TOTAL DECOMPOSITION OF THE TERMS OF THE CONTRACT -- YOUR USDT BOND WON'T DEPRECIATE WHEN THE BTC CRASHES -- AND THE DOUBLE DEATH SPIRAL IS CUT OFF FROM THE ROOT。

ACCORDING TO DATA, BY THE END OF 2021, THE U-STANDARD CONTRACT REPRESENTED MORE THAN 85 PER CENT OF THE TRANSACTIONS IN THE INTERNET-WIDE CONTRACT FOR PERPETUITY, WHILE THE CURRENCY-BASED CONTRACT WAS RETREATING AS A “SPECIALTY PRODUCT”, MAINLY FOR LONG-TERM HOLDERS WHO HAD LARGE BTC SPOTS AND WANTED TO HEDGE IN CURRENCY。

NOT ONLY HAS THE MARKET PATTERN OF THE TYPE OF CONTRACT CHANGED, BUT THE FAR-REACHING EFFECT IS THAT FOR THE FIRST TIME, “RISK ENGINEERING” HAS TRULY BECOME THE CORE DISCIPLINE IN CEX DERIVATIVE PRODUCT DESIGN. THE STAIRWAY CLEARING, ADL, MULTI-DATA SOURCE INDEX PRICES, EMA WINDOW OPTIMIZATION, PORTFOLIO BONDS - ALMOST ALL OF THE MECHANISMS THAT LATER BECAME INDUSTRY STANDARDS - FELL INTENSIVELY WITHIN TWO OR THREE YEARS AFTER 312。

It's an encoded derivative bar mitzvah。

Chapter III Institutional access and capital efficiency revolution (2020-2023)

From the casino to the arbitrage machine

The subsequent cycle of cattle markets (202021) has brought about a structural change: institutional capital has begun to view the market for encrypted derivatives as a serious asset class。

This change starts with a market business. Wintermute, Junmp Crypto, GSR and other top encrypted originals and high-frequency trading companies from the traditional financial transition have entered CEX’s sustainable contract pool on a large scale. Rather than making directional gambling, they do two things: to provide bilateral liquidity for the entry, to earn price differentials, and to make current arbitrage rates (more in cash and more in perpetuity)。

The large-scale entry of traders and arbitrage funds has had three quantifiable effects:

Effect one: the financial rate is “set”。Until 2020, BTC's financial rates were often at extremes of more than 0.1 per cent per hour, corresponding to annualization of hundreds or even thousands. After 2022, 98% of the BTC fund rate stayed within 20% of its annualization -- not that the market became rational, but that arbitral robots wiped out any significant deviations. According to the BitMEX study, the frequency of extreme fund rates fell by about 90 per cent from 2016 to 2023。
Effect two: The price differential for the disk is compressed。In 2019, the difference in the sale price of BTC's one-stop contract was usually between 0.5 and 1 basis point (bps), and in 2023 it was reduced to below 0.1 bps. For large amounts of money, the costs of friction at entry and exit sites were reduced by one order of magnitude。
EFFECT THREE: OI JUMPED IN ABSOLUTE VOLUME。THE HOLDING CAPACITY OF BTC'S LASTING CONTRACT HAS JUMPED FROM ABOUT $2 BILLION AT THE END OF 2019 TO ABOUT $9 BILLION AT THE END OF 2020, WITH A PEAK OF $28 BILLION AT THE END OF 2021. IN JUST TWO YEARS, OI GREW BY A MAGNITUDE。

Combination bond: Last step in the pursuit of Wall Street, and bybit's bend over

The degree to which institutional capital is willing to enter depends largely on capital efficiency. Early warehouse-to-ware deposits (Isolated Margin) isolated the funds from each warehouse and were extremely inefficient. Cross Margin had access to the funds in the account, but still kept the risk of different warehouses in total - For a combination of “multi-empty hedges” such as current arbitrage, it “can't understand” the two warehouse slots constitute Delta neutral and still requires a double bond。

Portfolio Margin, PM is the ultimate solution to this problem。It introduces an integrated risk assessment approach similar to the traditional CME Exchange SPAN (Standard Portfolio Analysis of Risk) or VaR (Value at Risk): instead of simply adding up the bonds of each warehouse, the system constructs a multi-dimensional scenario matrix (price ± 5 / § 10 / 15 per cent, volatility § 25 per cent, etc.), which calculates the net loss of the entire portfolio under each scenario, taking the worst scenario as a guarantee demand。

ONE MILLION BTCS, ONE MILLION BTCS, ONE MILLION BTCS

Roundup mode:Multiple bonds + empty bonds = double capital costs
Combination bond:System identified as Delta neutral hedge, net risk exposure, zero, bond demand compressed to close to zero

The gap is several times to dozens。

Here's the story of a curved supercar:PM is the key to Bybit jumping from the second-line exchange to the first stage of the first class。

On June 15, 2022, Bybit launched the Portfolio Margin model (which is actually FTX), which starts with the permanent and option product of USDC settlement. Two months later, in August, Bybit launched the Unified Trading Account, UTA -- the original segregated spot, U-place, currency, option account into a pool, where all position security requirements are calculated under a global risk matrix。

At the time of the collapse of LUNA’s deep-seated bear market, where institutional traders and quantitative funds were ever more sensitive to capital efficiency – an exchange that could compress demand for cash arbitrage near zero – would run several times more strategically than competitors. Bybit, using the PM + UTA combination of punches, pulled out of the "Second Platoon" after OKX in just one year, absorbing a large amount of liquidity from institutions that originally belonged to other platforms. Looking at Coinglass' data today, Bybit's OI/transaction ratio (0.71) is significantly higher than Binance (0.47) and OKX (0.28), a structural difference that is precisely the pre-emptive extension line of the PM of the year - Bybit has sunk more professional arbitrage rather than a simple hand change。

Binance, OKX has since followed up with their respective versions of the combination bond and the Unified Account, but Bybit has already taken over the mind of institutional users in the time window. By 2023, the portfolio bond will be fully landed on the head CEX and will be the standard for VIP and institutional users。

It means encrypting CEX's bond efficiency, and at this point it's even above the level of the traditional Wall Street broker - This is the last infrastructure puzzle for large-scale entry of institutional capital. And the one who took the biggest dividend from this puzzle is Bybit。

The birth of a double market

Interestingly, the dominance of the institution has not led to the disappearance of the diaspora, but rather to the “layering” of the market。

After 2023, a stable two-tiered market structure was formed:

UPPER: MAINSTREAM ASSETS SUCH AS BTC/ETH。Institutional spread arbitrage and quantification of market-led liquidity. The financial rate is locked in the normal compartment. It's almost impossible to profit from this in the long run from the directional gambling of the diaspora -- they can't fight robots here. According to the Wintermute industry report, institutional investors concentrated 67 per cent of their positions on the BTC and ETH sustainable contracts。
Lower floor: Yamaya, Meme, Goblin。The main battlefield in the diaspora. The reluctance of institutional arbitrage funds to enter (too thinly liquid, too weak a predictor, not matched by a risk return) has become a naked game between the dealer and the looser. Extreme funding rates, high volatility and frequent detonations are all here。

This stratification continues to this day and is deepening。

Chapter IV The age of weaponization of financial rates (2023-2025)

TRB: SCHOOLBOOK-LEVEL FORCED-OUT CASES

At the end of 2023, a prophecies token for a project called Tellor Tributes performed an air war with enough to be written into a textbook in the Eternal Contract。

This is how it goes:

Step one, spot control。THE GIANT WHALES WERE FIRST QUIETLY PUMPED INTO THE SPOT MARKET TO GAIN ABSOLUTE CONTROL OVER THE TRB ROLLER. THIS STEP IS NOT UNUSUAL IN THE OPEN MARKET BECAUSE EACH PURCHASE IS SCATTERED AND SLOW。
Step two, deep contract adhesion。THE WHALE BEGAN TO PULL FAST AT THE SPOT END WITH A SMALL AMOUNT OF MONEY. BECAUSE OF THEIR SKEPTICISM ABOUT THE FUNDAMENTALS OF THE TRB (THE PROJECT ITSELF WAS NOT CLEARLY PROFITABLE AT THE TIME), A LARGE NUMBER OF THE BULKYS WERE EMPTY ON THE CONTRACTUAL SIDE AND TRIED TO “CAP THE TOP”. THE RESULT IS A SIGNIFICANT LAG IN CONTRACT PRICES OVER SPOT PRICES, RESULTING IN DEEP ADHESION, TRIGGERING EXTREME NEGATIVE FUND RATES。
Step three, the cost rate is blood。Under the rule at the time, large rates were paid every eight hours. And it is the giant whale himself, who makes the books at the spot end of the plate while paying for it directly from empty pockets every eight hours at the fund rate。
Step four, emptied spiral。CONTINUED PRICE INCREASES EVENTUALLY TRIGGERED THE DEPLETION OF EMPTY BONDS. AN INFLUX OF MARKET PRICE PURCHASE ORDERS FROM THE CLEARING ENGINE DRIVES FURTHER PRICE INCREASES AND TRIGGERS THE NEXT ROUND OF EMPTY LIQUIDATIONS — THE CLASSIC POSITIVE FEEDBACK CYCLE. OVER THE YEARS, THE TRB PRICE WENT ALL THE WAY TO A HISTORICAL HIGH OF ABOUT $600, AND THEN THE AVALANCHE FELL. THE ONE-DAY FULL-WEB BURSTING WAREHOUSE EXCEEDED $7.0 MILLION。

THE CORE PROBLEM REVEALED BY THE TRB INCIDENT IS THAT THE FINANCIAL RATE MECHANISM HAS BEEN TRANSFORMED FROM A “PRICE-REDUCING TOOL” TO A “DIRECTED BLOOD PUMP” IN A HIGH-CONTROLLED, THIN-MOBILITY SCENARIO. IT SHOULD HAVE PUNISHED THE PARTY THAT DEVIATED FROM THE MARKET BALANCE, BUT UNDER THE “FALSE BALANCE” CREATED BY THE FAMILY, IT PUNISHED THE PARTY THAT JUDGED THE MARKET FUNDAMENTALS。

The emergency response of François is to adjust the rules - to reduce the frequency of settlement rates for long-tailed assets from 8 hours to 4 hours or even 1 hour, and to relax the single rate ceiling from ±0.75 to ±2 per cent or even ±3 per cent. The design is intended to force extreme deviations from rapid contraction by significantly increasing the cost of holding。

This reaction effectively suppresses the scale of the follow-up of similar scripts — but it itself becomes a double-edged sword。

ALPACA: RULES THEMSELVES WEAPONIZED

In April 2025, François announced that he would enter the ALPACA Finance's spot-and-renewal contract deal. In common sense, the downside means the depletion of liquidity and the marginalization of projects, and prices should fall sharply. A large number of traders are running wild with this consensus. (See:Related LinksI'm not sure

And then the price went up 10 times。

This is how it happened:

On the first level, the “certainty illusion” created by the lower shelf bulletin。When everyone thought that prices would fall, the empty space was extremely crowded at the end of the contract and was far more disproportionate. The fund rate was pushed to extreme negative because of the deep water。
Second floor, deadly depletion of the wheel。Following the publication of the next bulletin, rational long-term holders and market traders began to evacuate and spot liquidity contracted sharply. At this point, only a small amount of money is required to drive a significant increase in index prices at the spot end. Organized funds use this vacuum window with precision。
The third tier, the “reverse-aided attack” of the frequency-up mechanism。IN THE FACE OF UNUSUAL FLUCTUATIONS, COIN-AN HAS INITIATED THE INCREASE IN THE RATE OF DYNAMIC FUNDS IN ACCORDANCE WITH ESTABLISHED RULES FOLLOWING THE TRB INCIDENT. UP TO A FEW PERCENT OF THE RATE PER HOUR, WHICH WAS MEANT TO DRIVE EXTREME DEVIATION FROM RAPID RETURN - BUT IN THE ALPACA SCENE, IT BECAME AN ACCELERATOR OF BLOOD LOSS. EMPTY DEPOSITS HAVE BEEN HIT TWICE: ON THE ONE HAND BY LOSSES FROM PRICE INCREASES AND, ON THE OTHER HAND, BY BLOOD LOSS FROM RATES UNDER THE MECHANISM。
Level four, emptiness spiral。EMPTY MARGIN DEPLETION TRIGGERS LIQUIDATION, AND THE PURCHASE OF THE CLEARING ENGINE DRIVES PRICES TO CONTINUE TO RISE ... AS DOES TRB。

THE FAR-REACHING SIGNIFICANCE OF THE ALPACA EVENT IS THAT IT EXPOSED A PREVIOUSLY OVERLOOKED INSTITUTIONAL PARADOX:Exchange rules of wind control themselves can be treated as attack vectors。The mechanism was designed on the assumption that market participants would respond rationally to high-cost exits. But in the face of the overwhelming consensus created by the next proclamation, there is no room for rational exit – they see the lower shelf as a “necessarily falling” pricing premise, and the “punishment” of the rules push them deeper。

After the incident, the industry introduced fine-tuning of the transition period: Following the publication of the next bulletin, the leverage ceiling (e.g., from 20 to 5 times) was significantly reduced, the ceiling on holding was reduced step by step, the fund rate was discontinued at a high rate (recovering standard of 8 hours settlement) and the remaining warehouse positions were forced to be flattened with mark prices before the final shelf. The core idea of this combination is to simultaneously tighten all the parameters of wind control in the process of the progressive depletion of mobility, without giving any party the space to play in the final vacuum。

MYX, COAI, AIA: STRUCTURAL GAPS IN MONOPOLY ECOLOGY

TRB AND ALPACA ARE DRAMATIC SINGLE-POINT EVENTS, BUT THE REAL NORMALIZATION RISKS IN 2024-2025 CAME FROM A SMALL GROUP OF COINS WORTH BETWEEN MILLIONS AND TENS OF MILLIONS OF DOLLARS - MYX, COAI, AIA, ETC. THE COMMON FEATURES OF THESE “DEMONIES” CONSTITUTE A COLLECTION OF STRUCTURAL LOOPHOLES AT THE TEXTBOOK LEVEL:

Extreme mobility asymmetries。ON A DAILY BASIS, THERE MAY BE ONLY HUNDREDS OF THOUSANDS OF DOLLARS, BUT THE NOMINAL HOLDING (OI) OF A LASTING CONTRACT MAY BE SEVERAL TIMES OR EVEN TEN TIMES GREATER BY LEVERAGING. THE TAIL OF THE CONTRACT MARKET BEGAN TO SHAKE THE DOG OF THE SPOT MARKET. THE IMPACT OF A MEDIUM VOLUME SETTLEMENT EVENT ON THE CONTRACT WAS SUFFICIENT TO ALLOW SPOT PRICES TO MOVE BY A FEW PERCENTAGE POINTS。
Vulnerability of index prices。The spot transactions of these tokens may be concentrated in only one or two exchanges. The multi-source weighted protection mechanism for index prices has failed — the dealer can directly push the index price by using only a small amount of money at one or two spot points。
The extreme swing of the funding rate。Due to the reluctance of institutional arbitrage funds to engage in these low liquidity and high risk targets, the funding rate has lost its “ceiling”. It can soar to normal levels dozens of times in a short time。

The typical playbook of the evil coin movement is almost uniform: the dealer sneaks in at the end of the spot to prepare for the completion of the controls at the least liquid time (in the early hours of Asia or on the weekends) to launch a raid on the disc, and the contract has been full of air, and the price continues to rise to trigger an empty clearing, and the purchase price is pushed up into a vortex of 300 %-500 % price within hours, and after the empty head is cleaned, the dealer throws out the load with his hands, and the price is cut or lost within minutes, leaving a ruin of the two-way crater。

The exchange responds to the wind-control parameters of the constant tightening of long-tail assets — reducing the maximum leverage, increasing the rate of maintenance bonds and introducing a hold cap — but as long as there is a mobility gap between the spot and the derivatives, the currency will not disappear. This is a structured “tax” on encrypted derivatives markets, and as long-term contractual services cover long-term assets, the phenomenon will occur cyclically。

THE LATEST FORM: "DATA DISK" - SYSTEMATIC MANIPULATION OF LOW CIRCULATION CURRENCIES UNDER HIGH FDV

IF TRB IS A SINGLE-POINT FLASH, MYX/COAI/AIA IS AN OPPORTUNIST GOBLIN, THE RECENT PHENOMENON OF “DATA DISC” IS A STRUCTURAL UPGRADING OF THIS MANIPULATION PARADIGM. AND ITS ORIGIN IS NOT IN THE PRODUCT DESIGN OF A PARTICULAR EXCHANGE, BUT IN THE ECONOMIC STRUCTURE OF THE NEW ONLINE TOKEN ITSELF IN THE CURRENT BATCH -HIGH FDV, LOW CIRCULATION, HIGH CONCENTRATION OF CHIPS。

These three features are superimposed and constitute a "manipulated" token template:

HIGH FDVThis means that book-based valuations expand. Projectors and market vendors can support the start-up of billions of dollars in book value through minimal circulation chips that directly raise the psychological anchorage of market narratives. (You're not gonna do a $1 million project, but you're gonna do a $19 billion project)
Low circulationIt means real mobility is thin. The currency that is freely traded on the market may account for only 5 - 15 per cent of the total supply, while the rest of the locks are in teams, investors, and lock-outs. This very small turnover can be driven by small amounts of money in any non-moveable trading place。
The chips are extremely concentratedIt means the controls are available. The data from the chain can be directly validated - the top 20 addresses (teams, early investors, Sniper robots, associated traders) together hold more than 60% of the circulation chips, and these addresses are often linked to money and are essentially the same people。

WHEN THESE THREE FEATURES ARE ADDED TO A TOKEN THAT HAS CEX TO KEEP THE CONTRACT GOING, THE PATH IS MECHANIZED:

At the heart of the set is (product of High fdv, low float):The entire wind control mechanism for the renewal of the contract — tagging prices, financial rates, clearing engines — is essentially based on index prices. In turn, index prices come from bargains in spot markets. When the economic structure of contemporary currency dictates that the spot market can be manipulated by a small amount of money, the precision of the entire contract becomes a amplifier -- – Not to discourage manipulation, but to extend its effects to all participants in the contract market。

THIS MANIPULATION IS MORE "STRUCTURED" THAN THE TRB ERA:

Systematization。TRB IS A ONE-TIME EVENT, AND THE EXCHANGE SUBSEQUENTLY CHANGED THE RULES. HOWEVER, AS LONG AS THE DISTRIBUTION PARADIGM OF “HIGH FDV LOW CIRCULATION + CONCENTRATION” — WHICH IS THE MAINSTREAM SELECTION OF THE CURRENT INDUSTRY — IS WIDELY USED IN THE ISSUANCE OF NEW COINS, THERE WILL BE A PROLIFERATION OF ELIGIBLE TARGETS, EACH OF WHICH IS A POTENTIAL MANIPULATION STAGE. AN EXCHANGE PATCH WILL SOON FIND A NEW ROUTE TO ATTACK WITH THE NEXT COIN OF THE HOMOGENOUS STRUCTURE。
Cross the synergies。The manipulator is no longer limited to the single exchange ' s contractual entry. The spot price pollution affects all CEX-Binance, OKX, Bybit, Bitget, Gate ... a spot-manipulation to harvest multiple contract battles. This cross-cutting effect has resulted in much greater unit returns for manipulation than the single exchange approach of the year。
It's more subtle。THE DEALER CAN KEEP A RELATIVELY LOW PROFILE AT THE END OF THE CONTRACT, AND THERE'S NO NEED TO HOLD A HUGE AMOUNT OF MONEY OPENLY ON THE BOARD LIKE TRB. ALL “DIRTY WORK” TAKES PLACE IN THE SPOT MARKET OF THE CHAIN, AND THE LEGITIMATE BOUNDARIES OF THE CHAIN OF SPOT MANIPULATION ARE HIGHLY BLURRED UNDER THE CURRENT REGULATORY FRAMEWORK — IT CAN BE PACKAGED AS “NATURAL TRANSACTIONS”, “MARKET BEHAVIOUR”, “COMMUNITY OUTREACH”. THE END-OF-THE-CONTRACT SILOS WERE THE RESULT OF “NATURAL MARKET FLUCTUATIONS”, WITH NO VISIBLE COUNTERPARTY AND RETROACTIVE DIFFICULTIES。

A common misunderstanding needs to be clarified here: this phenomenon is not a problem arising from the design of a CEX “Alpha”, “innovation” or “observation” product. This kind of product is actually one of the places where these tokens are concentrated, but if Alpha is turned off, the same structure of the tokens will appear in other currencies -- – So long as the “high FDV low circulation + chip concentration” remains the dominant industry distribution paradigm, and as long as CEX is willing to renew contracts for these coins, manipulation will continue on a different stage. The real problem is not in the product patterns of exchanges, but in the distribution structure of tokens。

THIS IS AN UNPRECEDENTED CHALLENGE FOR CEX. TRADITIONAL WIND-CONTROLLED WEAPONS — PRICE SHEETS, DYNAMIC RISING FREQUENCY, TARIFF CAPS, LEVERAGE RESTRICTIONS, WAREHOUSE CEILINGS — ARE ALL INSTRUMENTS FOR THE CONTRACTUAL END. HOWEVER, THIS NEWLY MANIPULATED ATTACK VECTOR IS NOT AT THE CONTRACTUAL END, BUT AT THE INPUT END OF THE INDEX PRICE. AND YOUR SOPHISTICATED CONTRACT CONTROLS, FACING A SYSTEMICLY CONTAMINATED INDEX PRICE, CAN ONLY GO ALONG WITH A DISTORTION。

THE ADJUSTMENT OF THE MARK PRICE ALGORITHM IN SEPTEMBER 2025 HAS SOMEWHAT RESPONDED TO THIS CHALLENGE — BUT THE VULNERABILITY OF THE INDEX LEVEL IS INCOMPREHENSIBLE AS LONG AS THE “MULTI-SOURCE” OF MULTI-SOURCE WEIGHT DEPENDENCE ITSELF COLLAPSES INTO “MINUS” OR EVEN “UNI-SOURCE” UNDER SUCH A CURRENCY SCENARIO. THIS EXPOSES CEX TO A DEEPER STRUCTURAL CONTRADICTION: ITS SOPHISTICATED GEAR RELIES ON THE PREMISE THAT “THE SPOT MARKET ITSELF IS SOUND AND DOMINATED BY ENOUGH INDEPENDENT PARTICIPANTS”. AND THE CURRENT DISTRIBUTION PARADIGM OF HIGH FDV LOW CIRCULATION TOKENS BREAKS THIS ASSUMPTION。

The data disc is the most recent scar in the 10-year evolution of the contract. Its ultimate answer will not come from the windtips at the end of the contract, but either from changes in the token distribution paradigm itself (more equitable initial distribution, higher real circulation rates, stricter unlocking requirements), from the fundamental tightening of the above-currency standard (refusal to perpetuate structurally vulnerable tokens), or from the migration of derivatives to the chain – leaving the space free from reliance on predictives and centralized indices, and directly from the real current mobility pool。

There is no consensus on any of these answers. But one thing is clear:The modern currency itself is an elaborate machine of manipulation, and its sophisticated contractual infrastructure is its accomplice, not its counterweight。

Binance 's Bottom Formula Restructured September 2025

After TRB, the "up + relax cap" is a patchwork improvement. The ALPACA and MYX series events proved that the patches are no longer sufficient — there is a need to rethink the formula itself。

On 16 September 2025, François issued a bulletin entitled “Important Updates on Funding Rate Formula and Mark Price Calculation of Futures Contractors”, 18 September 2025. This was the first time since the renewal of the contract on line, that the money rate formula and the tag price algorithm were simultaneously modified at the bottom formula level。

unlike previous adjustments (re-threshold, cap, frequency of settlement), this change is the logic of calculation itself. the core context is a systematic reflection on the limitations of the previous two generations of funding rate mechanisms:

** the first generation (fixed 8 hours/0.75 per cent cap)** leaves a arbitrage window and a long manipulative window for pre-snisting。
** The second generation (dynamic upswing + relaxation cap)** effectively suppresses the duration of extreme deviations, but is itself weaponized into a “punitive mechanism” — TRB is the banker's rate of active arming funds, and ALPACA is the dealer's use of the upswing rule itself as an aid。

The root of the problem is not the size of the penalty, but the behavioural characteristics of the tariff formula itself under extreme market structures. That is exactly the question that third-generation reform is trying to answer。

AS THE LARGEST GLOBAL TRADE VOLUME CEX, CHANGES IN FORMULAE LEVELS HAVE DE FACTO INDUSTRY STANDARD-SETTING EFFECTS. EACH OF THE PREVIOUS INSTITUTIONAL REFORMS, LED BY CURRENCY SECURITY — THE SPREAD OF U-STANDARD CONTRACTS, THE ROLL-OUT OF LADDERS, AND THE STANDARDIZATION OF DYNAMIC RISING FREQUENCIES — WAS FOLLOWED UP BY COMPETITORS WITHIN MONTHS. THIS DOUBLE REVISION OF THE BOTTOM FORMULA IS ALSO EXPECTED TO TRIGGER INDUSTRY-WIDE CHAIN RESPONSES。

Chapter V Reconstruction of the sustainability and pricing paradigm (2024-2026)

PRODUCT EXPANSION: FROM BTC TO GLOBAL ASSETS

The evolution of long-term contract-based assets is itself a codification of the encryption industry。

2016-2019: BTC/ETH MONOPOLISTIC PERIOD。The total number of permanent contracts across the Internet does not exceed 10. The derivatives of long-tailed assets are extremely conservative on the part of the exchange — assets with insufficient spot depth are easily manipulated once contracted。
2020-2021: The full-blown outbreak of the DeFi wave。With the large-scale growth of the USDT and the spread of U-standard contracts, the uniformity of the French-language valuation has significantly lowered the threshold for cross-generic transactions. AAVE, UNI, SUSHI, and others, DeFi, SOL, AVAX, MATIC, etc., have a strong uplink contract. The total number of species on the Internet exceeded 500。
2022-2023: Expansion of varieties in bear city。Despite the deleveraging cycle of the market, the up-to-date speed of varieties has been accelerated by intense competition among exchanges. ARB, OP, etc. L2 tokens, various AI concept tokens, and a large number of Meme coins are centralized online. The number of durable contracts per head exchange exceeded 300-400。
2024-2026: Undifferentiated coverage。There are more than 500 permanent contracts, and the platforms such as Gate and Bybit are more radical, pushing the number to 800 or even 1000+. At the same time, gold (XAUSDT), silver and foreign exchange-for-life contracts in stable currencies have come online, marking a formal break in the spread of varieties across the boundaries of encrypted assets。

This cross-border expansion has a profound significance:ENCRYPTION CEX BEGAN TO ABSORB THE PRICING NEEDS OF GLOBAL MACRO-ASSETS ON WEEKENDS AND HOLIDAYS WITH A 7X24-HOUR UNINTERRUPTED LIQUIDATION CAPABILITY。WHEN THE UNITED STATES STOCK MARKET IS CLOSED AND THE FOREIGN EXCHANGE MARKET CLOSED, ANY GLOBAL MACROCRASH WILL BE PRICED AT THE FIRST TIME ON THE ENCRYPTED CEX ENTRY. A TOOL THAT USED TO SERVE EXTREME GAMBLING IS NOW A KEY PATCH IN THE TIME DIMENSION OF GLOBAL MACRO-ASSET LIQUIDITY。

Exchange patterns: three shuffles and current layouts

Over the past 10 years, the pattern of exchanges in the permanent contract market has undergone three complete shuffles。

2016-2019, BitMEX monopolistic。As an inventor of a lasting contract, BitMEX occupied over 80 percent of the derivatives market during this period. The XBTUD contract created a record of over $10 billion in single-day transactions。
2020-2022, Binance rises, BitMEX falls。The 312 incident seriously damaged the credibility of BitMEX, while Arthur Hayes, the founder, was shot dead by the United States CFTC. Binance is fast on top of the U-based contract with pre-emptive advantages, lower rates and greater liquidity. OKX, Bybit form the second stage. The FTX once hit the top three, but the 2022 thunderstorm got it out of history。
2023-2026, Multipolar Competition Pattern Stereotyping。According to Coinglass in April 2026 in real time: Binance continues to be at the top of the list, with a significant lead. It is worth noting, however, that the OO/Traction Ratio, which reflects the user's hold-up cycle and trade preferences, is not a good idea. The low value of Binance and OKX (0.47, 0.28), which means that users are more inclined towards HF short lines; the high value of Bybit and Gate (0.71, 0.76), which implies more medium- and long-term arbitrage and institutional hold-ups in their user groups; and the typical “low-hand-to-hand high sediment” characteristic of KuCoin 1.80. In the same market for sustainable contracts, different exchanges correspond to very different user minds and game styles. (Data:Related LinksI'm not sure

Bitget's Alternative Path: Cutting off a market with a "tracking deal"

While Bybit attracts institutions with a combination of bonds, another exchange has taken the exact opposite path — to serve the most intelligible bulky。

In 2020, Bitget became the first central exchange in the history of encrypted currency to launch a single transaction. The logic of this product is extremely simple: allowing a new user to click on a button and copy every opening, flat, loss and loss of a “master Trader” to his account proportionately. The elite traders draw their share from the proceeds of the documentary users, receive the experience of “saving money”, and the platform receives fees on both sides。

This is not an innovation in wind control mechanisms, but in user access mechanisms. It bypasses the core pains of a lasting contract: ordinary bulkers do not understand the complex system of index prices, tag prices, financial rates, steps of liquidation, but they want to participate in this high-yield market. A single deal makes a highly complex product that is packaged as a “one-key investment” consumer。

Korea became a killer market for this product。South Korea is one of the highest markets in the world with the highest level of domestication and acceptance of single products. – Historically, Korean shareholders have been keen to follow the real-time trade of “equity gods”, a culture that is natural for a single trade. Bitget has a heavy stake in Korea: localized operations, in-depth cooperation with local KOL, Korean and single-lined operations ... As a result, South Korea has become a central market for nearly 6 per cent of global flows, with public data in August 2025 showing that new regional follow-on users have surpassed 100,000 people. This number is very unusual for a global exchange — usually a single country does not dominate this proportion of users, and South Korea is as critical in the structure of Bitget。

Bitget's path provides another idea:While Binance, OKX, Bybit dominates the head market with infrastructure and institutions, an exchange can open up its own way through the entry point of “translating complex products to people who do not know what to do”。From the 2020 documentary deal to the 2025-2026 launch of the “CFDs” covering foreign exchange, gold, commodities, Bitget extends this product logic to a broader cross-asset field。

Competition in the sustainable contract market has never been merely “whose clearing engine is faster”. It is also “who can tell a new user about this complex product”. Bitget bet on the latter, winning his own piece。

OC ' S LONG CURVE: A 10-YEAR GROWTH OF FOUR ORDERS OF MAGNITUDE

Open Interest is a central indicator of the real decline in the market for a lasting contract - It represents the sum of the nominal value of all unsettled contracts and directly reflects the amount of real and silver “locks” in this market。

FOLLOW THE WEB-WIDE OC CURVE, A "ENCRYPTED DERIVATIVES DEVELOPMENT MAP" CLEARLY EMERGES:

TEN YEARS, FOUR ORDERS OF MAGNITUDE. THIS IS NOT JUST A CHANGE IN NUMBERS. THE $120 BILLION OC MEANS THAT THE MAGNITUDE OF THE FUNDS DEPOSITED IN THE SUSTAINABLE CONTRACT MARKET IS ALREADY COMPARABLE TO SOME OF THE CORE DERIVATIVES IN TRADITIONAL FINANCE。

The daily trade volume growth curve is even steeper: the current 24-hour world-wide encryption derivatives trade around $194 billion, of which lasting contracts account for about 93 per cent. Approximately $360 million in daily blasts, 49.3 per cent/50.7 per cent — This near-equilibrium ratio attests to the “ceiling” effect of institutional arbitrage on mainstream assets: the presence of large hedge funds tends to balance multi-empty power over head varieties。

THE STRUCTURAL DISTRIBUTION OF THE OI: A TWO-TIER MARKET UNDER THE LAW

THE CHANGE IN THE DISTRIBUTION OF OO SPECIES IS THE MOST ACCURATE BAROMETER OF MARKET MATURITY。

THIS DISTRIBUTION IS TYPICAL OF A MOLYBDENUM DISTRIBUTION — A SMALL NUMBER OF HEAD VARIETIES CONCENTRATE MOST OF THE OI, AND HUNDREDS OF LONG-TAILED VARIETIES EACH HAVE A SMALL SHARE, BUT THE SUM IS NOT NEGLIGIBLE。

THIS STRUCTURE IS PERFECT FOR THE “TWO-TIERED MARKET PATTERN”: INSTITUTIONAL FUNDS ARE CONCENTRATED IN FRONT-RUNNER VARIETIES SUCH AS BTC/ETH, USING A HIGHLY LIQUID ENVIRONMENT FOR BASE SPREAD ARBITRAGE AND TARIFF ARBITRAGE; AND BULK FUNDS ARE SPREAD ACROSS LONGTAIL VARIETIES FOR DIRECTIONAL SPECULATION. THE TWO WORLDS OPERATE ON THE SAME PERMANENT CONTRACTUAL INFRASTRUCTURE, FOLLOWING A VERY DIFFERENT GAME LOGIC。

Conclusion: a disaster lies behind each parameter

A clear pattern emerges: Each of the gears of this machine is a specific disaster that is carved in the market。

Multisource weighting of index prices- Because the single source was manipulated。
EMA SMOOTHING TAG PRICE- Because the needle once hunted innocent people。
Steps liquidation- Because it's been made of waterfalls。
ADL REPLACES SOCIALIZED CALLBACK– Because the coin invented this mechanism before BitMEX, OKEx demonstrated the fragility of the cooking pattern at the cost of 50000 BTC events。
U-TURN CONTRACT REPLACES CURRENCY- Because the death spiral in 312 almost devoured the whole market。
Combination bond— because simple additions waste too much capital and block institutional entry。
Storage ceiling- BECAUSE A MAN'S 50000 BTC WAREHOUSE ALMOST DESTROYED AN EXCHANGE。
Increased rate of dynamic funds- BECAUSE THE TRB'S FINANCIAL RATES DRAW BLOOD TO SHOW THE INDUSTRY THE LETHALITY OF A LONG SETTLEMENT WINDOW。
Bottom-up restructuring of the funding rate formula (September 2025)- BECAUSE ALPACA PROVES THAT THE MECHANISM ITSELF CAN BE WEAPONIZED。
Detailed management of the lower shelf transition– Because the lower notice used to be a precise attack signal。

The latest pattern of the data disc phenomenon reminds everyone that contractually refined wind controls do not counter a spot index of systematic contamination - the source of contamination is the currency distribution paradigm itself。

None of the parameters is superfluous, as each of them stands behind a disaster that happened。

Ten years of a lasting contract, from a toy toy to a global pricing machine that handles almost $200 billion in traffic daily. It serves people from encrypted punk to Wall Street Quantitative Fund, from BTC to Meme, from encrypted raw assets to gold foreign exchange. Each of its upgrades was accompanied by a huge explosion and angry users, but each post-crisis repair left a new building block。

It is an evolutionary theory of encrypted financial engineering, written in real money and silver — and in the loss of millions of people。

It's not finished。

May we always maintain a sense of respect for the market。