On June 19th, the Binance Director of Derivatives, Justin Cheng, was invited to hitch an AMA within the Ontology English Telegram the Co-founder of Ontology, Andy Ji, to share their insights and steering on Futures buying and selling.
Test the chat message historical past of AMA right here.
Part 1: High 10 pre-selected questions
Q1. Is Binance Futures unique for less than skilled merchants? What are you able to suggest for rookies like me? (@Nickkiii)
Justin: Binance Futures isn’t completely just for skilled merchants, however futures and all different spinoff merchandise are superior merchandise so it can be crucial customers ought to familiarize themselves first.
In case you are an entire newbie to cryptocurrency solely, we strongly suggest they make investments the time to study. Developments within the crypto market transfer quick however the fundamentals will at all times be there: understanding why Bitcoin and cryptocurrency are vital, understanding the rules of spot buying and selling versus futures buying and selling. It is very important grasp the foundational ideas of cryptocurrency. As buying and selling is a monetary exercise, it’s also vital to acknowledge and perceive the dangers concerned.
Binance Academy supplies very helpful data and academic assets, we might suggest customers test it out.
Q2. How does Binance Futures derivatives market shield speculators from main losses in derivatives? What are the danger management mechanisms? (@shinichiconan214)
Justin: “Derivatives can help you margin or leverage buying and selling, that means you’ll be able to enter a buying and selling place with a price a lot bigger than your invested buying and selling capital. The leverage is the multiplying ratio between the 2 values.
This implies not like a 1:1 buying and selling ratio, you will have the potential to hedge or make returns at the next ratio, however it naturally additionally means a bigger potential loss if the market strikes towards your buying and selling place.
We strongly suggest customers to solely take dangers they might deal with, and we have now place limits for customers utilizing excessive leverage. For instance, customers buying and selling ONT with 50x leverage can solely open 5000 USDT value contract and with 20x the place restrict is 25000.
Really, in the event you commerce ONT at 50x and open a 5000 USDT place, the capital that you must have is barely 100.”
Q3. Is there any safety in place for individuals who might have carried out the flawed factor unintentionally, or maybe went too massive and stand to lose an excessive amount of? (@Jonatan)
Justin: This can be a related query to the query above, we do have a value restrict to stop fats fingers.
In circumstances the place the market strikes too abruptly, we activate our insurance coverage fund to cowl the merchants’ extra losses past their invested buying and selling capital. We’ve got used our insurance coverage fund a number of instances and we’re identified available in the market for the way we assist shield our customers.
Final month in Could earlier than the third Bitcoin halving, the market noticed sudden volatility and we used round $7-$eight million to assist shield customers. The subsequent day we invested one other $30 million into the insurance coverage fund. We couldn’t know if the costs will transfer abruptly once more, however we all know we wish to shield our customers.
This autumn. Are you able to briefly say how the Binance system is designed to be steady and dependable for Futures merchants, even in unstable instances? (@Ferlee)
Justin: We talked concerning the insurance coverage fund earlier on. Relating to stability and reliability, we have now in all probability essentially the most steady and dependable buying and selling system available in the market.
We pay utmost consideration to the design and stability of our matching engine proper from the beginning as a result of we wish to ensure our system is prepared for the long-term. Consequently, we are able to confidently say that our system is able to NASDAQ-level output. We will deal with 100,000 orders per second with a median latency (velocity) of 5 milliseconds.
Even when the market skilled durations of excessive volatility, our system labored effectively with no points or delays. One latest case was what’s now referred to as Black Thursday, on March 12, when the WHO designated COVID-19 a pandemic. World fairness markets had been closely affected, and the value of Bitcoin fell by half. This affected many exchanges because it resulted in a excessive quantity of buying and selling positions being liquidated in a really quick time, however our system functioned usually.
Q5. I normally commerce ONT on the Binance spot. So, what’s the distinction when buying and selling ONT on Binance Futures, and what are the benefits when buying and selling $ONT futures on Binance versus others trade? Thanks! (@shinichiconan214)
Justin: With spot trade, you’re normally buying and selling on a 1:1 ratio. Futures merchandise are extra advanced as a result of they’re designed for hedging functions and likewise for arbitrage alternatives. The ratio of returns might be greater, however customers should perceive the potential draw back can also be bigger. I at all times advise individuals to grasp the merchandise first. Customers ought to learn up on the academic data we have now obtainable, and likewise ask questions. Our help workforce is at all times on-hand for the group.
One benefit of buying and selling with Binance is that we offer a handy single platform, permitting customers to commerce spot and derivatives, in keeping with their particular person preferences and the way customers want to handle their very own buying and selling portfolio. More often than not they’ll conveniently use one single pockets.
And you can be comfortable to study that Binance is the one main trade providing futures buying and selling for ONT. We’re glad to have the ability to help the Ontology group.
Q6. Is there a plan for Binance so as to add $ONT to the perpetual buying and selling part? (@nothey)
Justin: Sure, we have now listed it. Yow will discover out extra data right here.
Andy: Binance is the biggest liquidity platform which is providing the ONT perpetual buying and selling.
Q7. At the moment, Binance has registered #ONT to Future however solely has 50x leverage. Are there any plans so as to add as much as 125x leverage? (@isnaindhuha)
Justin: We’re at all times listening to the group, and we assess every itemizing and make changes accordingly. Right now, it looks as if 50x leverage is fashionable for #ONT and the group appears comfy with the extent of leverage and threat, however relying on the suggestions we might make changes once more sooner or later.
Q8. There are an increasing number of opponents in Futures like Bitmex, OKEx, FTX, Bybit, HuobiDM. So How does Binance plan to remain aggressive with so many new merchandise and gamers available in the market? And How do you forestall market manipulations by whales? (@Adsus4)
Justin: Binance as an organization began in 2017, and we solely began providing futures final yr in September 2019, so comparatively talking we’re one of many youthful gamers available in the market. By means of our onerous work and dedication, we have now earned the belief of the group and we’re grateful that customers respect the work we put into innovating crypto spinoff merchandise.
One of many methods we keep aggressive is by discovering out what are the tokens in demand, so we are able to help product improvement accordingly. For this reason we take part in AMA classes like at this time’s so we are able to proceed to be near customers and listen to their suggestions.
We’re product and technology-oriented and we really consider good merchandise that serve customers effectively will stand out from the competitors. Binance has introduced fairly a number of improvements to the crypto derivatives trade. Our product is the primary USDT denominated futures and it’s a lot simpler to grasp for customers than inverse contracts.
As for market manipulations, we use mark value to do threat administration, which is consisted of a value index of most liquid spot exchanges, so it is rather onerous to be manipulated.
Q9. Is there a minimal & most quantity to commerce? It will likely be buying and selling leverage? Are $ONT & $ONG to have extra buying and selling pairs? (@Alexa742)
Justin: At the moment for ONT, the minimal and most perpetual contract sizes are 0.1 and 1,000,000 respectively, and customers can have as much as 50x leverage. Will we have now ONG pairs? That’s one thing we’ll take into account, relying on its reputation with the group and different elements together with threat.
Q10. Value is a significant component for buyers, and Future buying and selling has important dangers. What are you anticipating from the Binance Future opening? The way it will help Ontology to develop in each phrases value and quantity? Do you will have a plan to do some promotional exercise to draw extra future merchants? (@ahsanedge)
Justin: We constructed Binance Futures to supply a protected, steady platform for customers to commerce crypto derivatives and we consider a strong spinoff market is sweet for the underlying asset, which is Ontology on this case. Derivatives are vital hedging and arbitrage instruments, and because the cryptocurrency market will get an increasing number of mature, hedging will grow to be extra vital for buying and selling methods.
We’re at all times exploring new promotional and community-orientated actions. For our most up-to-date Quarterly Futures launch, we have now a promotion for the primary 30 days, the place all customers will take pleasure in between 0.010% and 0.015% in maker rebates, in addition to a flat 0.020% in taker charges — the most affordable charges for deliverable contracts within the trade.