DeFiance Capital CEO has highlighted significant structural flaws in the design and market structure of crypto derivatives, particularly perpetual contracts. He pointed out that these issues pose major challenges to the industry's sustainable growth. The CEO referenced past incidents, such as the 50% to 70% Bitcoin plunge in March 2020 and the October 2020 altcoin crash, which were worsened by systemic failures in price discovery markets.
He noted that the prevalent use of 'Quanto mode' BTC perpetual contracts at the time, which were BTC-denominated and BTC-collateralized, increased reflexivity risk and made hedging difficult. The shift to USDT-margin perpetual contracts has since improved market structure and reduced volatility. The CEO expressed optimism for the development of next-generation perpetual contract products to further enhance the safety and quality of crypto derivatives.
DeFiance CEO Criticizes Structural Flaws in Crypto Perpetual Contracts
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