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BTC $77,892.10 -0.02%
ETH $2,312.41 -0.94%
BNB $625.53 -0.91%
XRP $1.40 -1.61%
SOL $85.09 -1.21%
TRX $0.3258 +0.70%
DOGE $0.0981 -0.36%
ADA $0.2469 -1.99%
BCH $453.58 +0.56%
LINK $9.30 -1.36%
HYPE $42.56 +3.55%
AAVE $96.24 +1.46%
SUI $0.9291 -1.34%
XLM $0.1675 -1.95%
ZEC $356.48 +1.06%

contracts

first_img Chief Economist of New Fire Group, Fu Peng: The essence of Bitcoin perpetual contracts is that large holders earn rent from long-term positions, while retail investors pay for leverage to go long

The newly appointed chief economist of New Fire Group, Fu Peng, stated on Twitter that the underlying business model of Bitcoin perpetual contracts is essentially the same as the "rollover fee/overnight fee" in traditional finance's gold and industrial commodity spot exchanges.Fu Peng pointed out that back in the day, gold exchanges settled through daily forced liquidation, with longs and shorts paying each other rollover fees. When retail investors held a large number of high-leverage long positions, the rollover fee became the most stable and hidden source of income for the platform. Nowadays, Bitcoin spot platforms mainly rely on perpetual contracts, with both sides settling the funding rate every 8 hours. When longs dominate, retail investors holding long positions continuously pay funding rates to shorts.Although the platform does not directly collect this fee, it significantly enhances trading activity, open interest, and liquidity, indirectly generating a large amount of fee income and forming a stable and substantial cash flow. Essentially, it is a business model where large players/institutions "collect rent" from long-term holdings, retail investors pay for leverage to go long, and the platform indirectly takes a cut.

The trends of commodity contracts are diverging, with Gate's oil trading volume ranking first in the world

According to CoinGlass data, Brent crude oil (XBR) has a 24-hour contract trading volume of 16.5 million USD across the network, with a contract open interest of 6.2258 million USD; among them, the Gate platform has a 24-hour contract trading volume of 15 million USD, ranking first in the world; the contract open interest is 2.67 million USD, ranking second in the world. WTI crude oil (XTI) has a 24-hour contract trading volume of 20.6188 million USD across the network, with a contract open interest of 22.8109 million USD.Among them, the Gate platform has a 24-hour contract trading volume of 13.08 million USD, ranking first in the world; the open interest reaches 4.75 million USD, ranking second in the world.In the metals sector, the 24-hour trading volume of XAG contracts across the network reaches 900 million USD, among which the Gate platform's XAUT/USDT contract open interest records 72.3609 million USD, ranking third in the world.Currently, Gate has fully deepened its TradFi layout, with the spot sector supporting stock and metal trading, and the contract sector covering diversified assets such as gold, silver, foreign exchange, indices, and commodities. With a flexible USDT settlement mechanism and up to 100 times leverage, Gate continues to assist global investors in achieving cross-market, round-the-clock asset allocation and risk management.
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