The company is preparing to open up futures contracts, or compete with BitMEX

According to The Block, coon is looking to break into The cryptography derivatives market, a move that could put it in competition with exchange giant BitMEX.

Discussions have been under way for some time that the world's largest cryptographic exchange by volume is building a derivatives trading facility, but few details have been disclosed to the public.

However, the smart cryptocurrency order routing company & NBSP; Bitsian chief executive Raakhee Miller and chief technology officer Steven Brucato said Binance is building a platform to offer perpetual contracts for trades, a cryptocurrency-specific derivative, in AsiaAsia is very popular.

"Perpetual contracts are an invention of the cryptographic world," Miller said. "I think that's the nature of contracts and that's very attractive to the Asian market."

A perpetual contract is similar to a futures contract, except that it has no expiration date and is smaller every few yearsShall be settled once. The perpetual contracts were created by BitMEX, the cryptographic derivatives exchange, which generated millions of dollars in net revenue. Currently, OKEx and BitMEX are the world's two largest cryptographic permanent futures exchanges. In march of this year, the two companies handled it dailyDerivatives trading exceeded $2.1 billion.

Miller and Brucato also suggest that Binance build a matching engine for its derivatives platform. The matching engine is an algorithm that automatically matches buyers and sellers. The technology is at the heart of many exchanges, and coon itself has previously built a matching engine for its decentralized exchange test network.

The derivatives fight

BitMEX is one of its biggest competitors in the derivatives market. The matching engine it runs is said to be not strong enough to meet all the orders the platform receives on a daily basis. System overloads have plagued BitMEX for years and caused many complaints among trading users. Mr. Brucato said coon is trying to get around the problem by developing a better matching engine and limiting the speed at which traders can send API requests.

Brucato argues that the ambit should not have this problem because 1) they have a higher capacity matching engine and 2) the rate limit of the API prevents this from happening.

Coon is not the first, nor the only, company to want to enter the derivatives market. Derivatives vendors are racing to roll out as many products as possible, cover as many COINS as possible and grab significant market share. Futures liquidity has been concentrated in BitMEX and Deribit. "Said Darius Sit, managing partner of cryptography trading firm QCP Capital. We'd love to see if Binance can steal some of the bitcoin traffic... But it's unclear how easy it would be to steal some of the traffic from BitMEX. & quot;

BitMEX wants to offer options trading in addition to its popular perpetual contracts; Derebit trades both options and futures and has expanded its services from BTC to ethereum. CoinFLEX dominates the physical delivery futures markets for ethereum and BTC, and recently added BCH to its list of services.

Futures liquidity has been concentrated in BitMEX and Deribit. Darius Sit, managing partner at cryptography trading firm QCP Capital, said, "we'd love to see if coon can get a share of BTC traffic... but we're not sure how easy it is to steal that traffic from BitMEX."

Currency security advantage geometry?

First, coon has a large global customer base that no other exchange can match. This provides a solid starting point for liquidity.

Moreover, because exchanges such as BitMEX and OKEx are not regulated, their KYC checks are more lax, meaning investors on these platforms face higher default and liquidity risks. If coon's U.S. derivatives store can get regulatory approval, it may already have an advantage over other exchanges.

In the end, the safe appears to be able to offer a diversified portfolio of derivatives, peg them to multiple currencies for regulatory approval and build a system that is less prone to collapse. Even so, with fierce competition and uncertainty over government approval, there is no foolproof formula for success in the derivatives market.

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