The inside story of how a hike in Hong Kong changed crypto trading forever
The perpetual swap, a cornerstone of modern cryptocurrency trading, was conceived during a 2015 hiking trip in Hong Kong by BitMEX co-founders. By creating a futures contract that never expires and using an overnight funding rate, they revolutionized leverage trading in the digital asset market.
Why it matters
The invention of the 'perp' fundamentally changed the liquidity and structure of global crypto markets, enabling the high-leverage trading environment seen today.
It was sometime in 2015, on a hiking trail in Hong Kong, that the perpetual swap — also called a perpetual future or a “perp” for short — was born. Ben Delo, the mathematician and co-founder of BitMEX, was walking with a friend called Bavik, a derivatives trader, wrestling with a problem that had been nagging at him for months.
BitMEX had been trying everything. Quarterly futures, monthly futures, weekly futures, 48-hour futures, even a contract that lasted just 24 hours before resetting. Nothing was working. Customers kept complaining that their positions were closing without warning. They wanted something that looked like spot, traded like spot, but gave them the leverage that only a derivatives exchange could offer.
"What if a future never expired?" Delo asked.
Bavik's answer was immediate. "Mathematically, it would be worth infinity," Delo recalls him saying.
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