EQUOS, the cryptocurrency exchange of Diginex Limited (Nasdaq: EQOS), the digital assets financial services company has launched its Bitcoin (BTC) Perpetual Futures Contract (BTC/USDC(F)). The successful launch of the BTC Perpetual is a major milestone in the roadmap of derivative products that are being introduced by EQUOS. Derivatives linked to traditional financial assets like equities, commodities or foreign exchange often eclipse the value traded in the underlying spot markets by hundreds of times.
Derivative products are nascent in the digital asset industry and are presently not offered by some of the major digital asset exchanges. From near nonexistence only a few years ago, the size of the virtual currency derivatives market has begun to show signs of its immense growth potential, growing at over four times the spot market during the third quarter of 2020 and reaching a volume peak of $67 billion in a day at the end of November.
The Perpetual contract is well suited to the current trading environment and can be conveniently used for macro position taking as well as for risk management purposes. The product is designed to ensure that professional traders and institutional investors can always benefit from transparent and fair market conditions. Prices and liquidity on the EQUOS exchange are only provided by independent market makers and EQUOS does not make markets on its own platform, ensuring that all traders always have equal visibility of the orderbook.
In addition, the EQUOS BTC Perpetual contract is underpinned by a Liquidation Platform that is exclusively dedicated to handling liquidation events. Pricing in the pool is provided by several independent market makers that add depth and price competition to ensure that liquidation orders are executed at the market price. If there is insufficient liquidity to handle the size of liquidated positions, the main EQUOS order book can act as a backup. EQUOS also provides a final backstop for liquidation events through its Liquidation Reserve, which is part funded by liquidation fees and a portion of trading revenues.
Richard Byworth, CEO of Diginex commented: “A functional, robust derivatives market is critical to providing liquidity and risk management opportunities for traders and is key to attracting institutional investment into cryptocurrencies and digital assets more broadly.”
“Our goal is to develop product with functionality that will facilitate wider institutional and professional trader adoption of cryptoassets. This is just the first in a product suite that will offer investors more dynamic hedging tools, fairer liquidation, a platform that is not trading against its users and reputational protection for investors seeking a KYC/AML compliant ecosystem.”
Neil Sheppard, COO Financial Services at Diginex said: “We are pleased to bring to the market a perpetual product which is uniquely designed to ensure that we can deliver optimal opportunities to manage risk and exposure for professional and institutional traders as well as retail customers, while also providing a fair liquidation process.”
“In this way, traders will be able to gain exposure to the largest cryptocurrency by market capitalization, and benefit from price movements in a controlled environment.”
Diginex has offices in the UAE as its sees the region as an interesting area for digital securities.