New Economies Founders Alice Hlidkova and Lucas Cervigni travel to Seoul, Korea, earlier this week to attend the official launch of Perpetual Swap and other innovative products developed by the Malta-based cryptocurrency exchange Okex.
Perpetual Swap is a peer-to-peer, virtual derivative with key benefits including no expiration dates and consolidated liquidity.
Okex Financial Market Director Lennix Lai elaborated, “We have one contract and the specifications include USD pairs and no Tether exposure, benefiting traders.” shared Other key benefits, according to Lai, include a market-driven mechanism which ensures the anchor to the index and a leverage of “up to 100x, which is higher when compared to margin trading.”
Lai invited Hlidkova and other traders to a panel discussion on the topic of perpetual swaps and futures, explaining that the “difference in trading strategy comes down to the risk traders take on.”
On managing this unique uncertainty and risk, Hlidkova cautioned traders to do their own research, adding, “At New Economies, we vet exchanges so our investors are protected and have greater confidence in the product. We work with regulated exchanges but are also interested to see the unique value proposition of unregulated exchanges such as Okex.”
Earlier, Hlidkova spoke to trader and New Economies partner Gabriel Allie on trading strategies. Allie who is based in the United States said, “Futures are less risky and have lower fees with long-term leverage trades. Whereas swaps are more short-term trades that may be less than a day, swaps make it easier to get in and out of a trade quickly with the risk of unexpected high fees if a trader gets caught in a trade for too long.” Allie mentioned that those who go against the trend get rewarded and agreed with Lai that they provide higher leverage. He recommended for exchanges to allow for more freedom on draws and greater transparency on fees, “because a lot of people don’t realize what they have until they make a trade and are surprised. Lastly, traders should check the volume. The reason people use Bitmex for derivatives is due to large volume size making it easier to get larger orders filled.”
New Economies Advisor and Head of Research, Shermineh Salehi Esmati, provided additional commentary on the future of unregulated exchanges such as Okex:
“The difference between crypto derivatives listed on CME or CBOE and on Okex is that the prior have risk management safeguards against volatility. They are also safer for traders, as they are regulated by the SEC,” she said.
Ms. Esmati recommended that traders look at position marketing, initial and maintenance margin and funding, adding, “if the rate is positive then also look at the timestamp since that impacts when you receive funding.”
Although Hlidkova cautioned the future of exchanges rests on their ability to attract larger traders incentivized by market makers for placing larger trades, she concluded that the truly unique opportunity is in the “user-friendly interface with AI support and AI support as a premium product,” as discussed earlier with Cervigni.
The New Economies team looks forward to further developments from Okex, including the ability of the community managed exchanges like CoinAll to share Okex’s liquidity to allow users to log into their accounts using Okex credentials.
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