In the case of centralized competition from external exchanges and constant changes and improvements in user needs from internal concerns, what differentiated differences will the MXC matcha contract market after this upgrade bring, and whether it can withstand everyone’s test? ?
Author: Lou Yue
There are many ways to play in the encrypted market, and most funds entering the secondary market may not be able to bypass the basic spot and contract transactions.
Financial derivatives market
Traditional financial derivatives usually refer to contracts that rely on changes in the value of a certain underlying asset, including standardized contracts such as futures . Based on functions such as arbitrage, risk aversion, and price discovery , they have both zero-sum games and high leverage . Therefore, it has gradually become one of the main driving forces driving global derivatives trading volume to record highs.
According to the latest data released on the official website of the China Futures Association, the scale of transactions on the national futures market in September increased compared with the previous month. On a unilateral basis, the volume of transactions in the national futures market (including options) in September was approximately 624 million, with a turnover of approximately 459,500. 100 million yuan. In the first nine months of this year, the cumulative trading volume of the national futures market was about 4.265 billion lots, and the cumulative trading volume was about 302.8 trillion yuan, a year-on-year increase of 47.17% and 41.29% respectively.
In the first three quarters of 2020 turnover exceeded 3 trillion yuan mark, the second highest in history, and the trading volume and turnover have been more than 2019 full-year (turnover of 3.962 billion hand, turnover of 290.61 trillion yuan) .
Yang Guang, deputy secretary and general manager of the China Futures Market Monitoring Center, said in an exclusive interview with a reporter from the Futures Daily that as of September 24, the total market capital of the futures market was nearly 800 billion yuan , an increase of over 40% compared with the end of 2019. An increase of over 80% at the end of 2017; 1.8808 million effective customers in the futures market, an increase of 41.6% compared to the end of 2017; the structure of the futures market is gradually institutionalized, and the legal person’s equity currently accounts for more than 60% of the total market, a significant increase from the end of 2017.
Although the domestic futures market has achieved vigorous development, in the international derivatives market, products including foreign exchange, futures, options, etc. account for more than 80% of the market share . Compared with this, there is still room for development. The development of the crypto derivatives market is also following the development trajectory of the traditional market to a certain extent.
The total nominal value of unexpired OTC derivatives by risk category, source:BIS
With CME, CBOE, and ICE’s Bakkt Bitcoin futures contract entering the encryption field, it opened up the channel for Wall Street institutional funds to enter Bitcoin transactions, and at the same time accelerated the entry of some traditional financial capital, which enhanced the positive impact of the mainstream market .
In addition, the volume of the crypto market is gradually growing. Whether it is large institutional capital or retail investors, the awareness and utilization of the crypto derivatives market has improved. The entire derivatives market has achieved rapid development, and funds are also consciously through futures contracts. Trading to do risk control or asset allocation .
The encrypted digital currency market has gradually expanded from relatively mainstream derivatives transactions such as spot, leverage, contracts, and options to innovative gameplay such as lending and insurance. With the continuous increase in trading varieties, it has brought new participants and With incremental funds, the market is developing healthily.
The increase in investment atmosphere, investment opportunities, and investment levels in the crypto derivatives field has also led to a significant increase in the scale and number of crypto investors. Professional-level institutional users also have more hedging needs. The entire crypto derivatives market There is still a huge space for exploration.
The new competitive landscape of the crypto derivatives track
Judging from the current status of the crypto exchange market, according to the October crypto exchange data report released by cryptocurrency data provider CryptoCompare, the monthly spot trading volume of many top exchanges has fallen sharply . In general, the spot trading volume of the market in October It fell by 17.6%, but the monthly derivatives trading volume remained relatively stable . The total derivatives trading volume in October reached 619.9 billion US dollars, and derivatives continued to account for more than 40% of the total market share.
The market share of encrypted derivatives is showing a steady upward trend , and major exchanges have also sensed potential opportunities and have deployed on the contract track. According to data collected by CoinGecko, one of the mainstream cryptocurrency information portals, as of now , the global total of 366 stock exchanges and exchange contracts only have 43 to remove the two DEX (to the center of the exchange), only 41 centers of the derivatives exchange.
Since the overall development time of the cryptocurrency derivatives market is relatively shorter than that of the mainstream market, and is still in a stable exploration stage , it has higher requirements for the exchange’s own technology, risk control, operation, market, and comprehensive strength. Compared with spot exchanges, the threshold for the creation of derivatives exchanges is relatively high .
The ecological pattern of derivatives exchanges is also constantly changing. Older exchanges such as BitMEX and OKEx have seized market opportunities and formed a “two-legged” pattern. However, with Huobi and New exchanges represented by Ann, Bybit, FTX, MXC Matcha, etc. have gradually gained a firm foothold in the market with their different advantages and positioning. The market share of derivatives has begun to be rebalanced , and a new competitive landscape is also brewing in the process of maturity.
In order to stabilize and expand their market position, various exchanges have gradually launched more explorations in terms of stability, trading functions, and user experience , and then sought to obtain a lot of traffic and users. For example, MXC Matcha recently announced its involvement in the contract market, relying on the existing user base to compete for the contract market.
So, in the case of centralized competition from external exchanges and constant changes and improvements in user needs from internal concerns, what differentiated differences will be brought about by the upgraded MXC matcha contract market, and whether it can withstand everyone’s test What about?
MXC Matcha new version contract “Late over”
MXC Matcha was established in April 2018. According to the official introduction , its core team members come from well-known technology companies and financial companies, and are deeply involved in the blockchain technology community and traditional financial industry. “Matcha” is the nickname derived from community users. Currently, green tea to create a one-stop digital asset transaction services, can also provide services including cash, leveraged, ETF, index trading, contracts, DeFi PoS mining and mineral pools, including the user.
In terms of security , MXC Matcha has formed a technical team, and at the same time, it has conducted in-depth cooperation with many well-known security institutions in the industry, such as Chengdu Lianan, SlowMist Technology, and Know Chuangyu, to ensure the safety of user assets. In terms of compliance , MXC Matcha has successively applied for compliance licenses in 5 countries including Estonia, Switzerland, Canada, Australia and the United States since its establishment.
Looking back at the general development of MXC matcha, we can find that 2019 was a “turning year” for its development so far. At that time, it took advantage of the opening of new assets and its innovative and changeable gameplay to drive transaction volume and The number of users made a breakthrough in a short time, and it became the ” dark horse exchange ” of the currency circle at that time.
With the rapid rise of the exchange, MXC Matcha slowly began to try its transformation after listening to some market opinions and combining its own actual conditions. With the subsequent self-growth and management enhancement, it has gradually precipitated some of the user’s reputation and reputation.
MXC Matcha Exchange also slowly moved towards a more mature, stable, and segmented path when exploring its development direction. So the team announced the launch of a new version of the contract trading function after nearly two years of establishment, and joined the exchange contract track. In the battle for supremacy.
Multi-angle analysis of matcha contract products
Although encrypted derivatives contracts can use small capital to leverage large capital and obtain greater operating space, for investors, in addition to certain investment expertise, they also need to control their positions to avoid extreme market conditions. The risk of liquidation, therefore, will choose the exchange carefully.
Although the current contract products of various exchanges are not the same, users are still most concerned about the exchange’s performance in terms of trading mechanism, basic depth, risk control, liquidity, and user experience . As a new upgraded product of Matcha, contract products need to find good breakthroughs at these key points in order to maximize the trust of traders and find their own place in the competition between exchanges.
Basic contract information
MXC Matcha contract products provide perpetual contract trading , that is, there is no expiry delivery time, and there are no restrictions on the holding time. Support includes mainstream currencies represented by BTC and ETH, popular DeFi tokens represented by LINK, YFI, SUSHI, etc., and mainstream platform currencies represented by OKB and HT. A total of 60 cryptocurrency perpetual contracts are provided. Covers the most liquid asset classes in the market.
In terms of leverage, users are currently supported to freely adjust long and short leverage between 1-100 times . Any leverage can be modified from the leverage of each position, and it can also be modified from position to position to full position to meet different risk requirements of users.
The MXC Matcha perpetual contract currently supports USDT settled forward contracts. Take the BTC perpetual contract as an example. Each contract is worth 0.0001 BTC, the minimum price change is 0.5, the minimum transaction quantity is 1 contract, and the risk limit of the contract volume is 800,000.
- Two-way position
In the contract transactions provided by MXC Matcha, users can hold long and short bidirectional positions on a contract at the same time, and support the independence of long and short direction leverage. In each contract, long positions are combined and short positions are combined. When holding long and short two-way positions, the two-way positions need to occupy the corresponding margin according to the risk limit level.
The trading model of two-way holdings provides traders with more operational trading strategies. At present, many derivatives exchanges do not support changing the trading model. However, it is worth noting that although the “long-short win-win” can be achieved through the hedging arbitrage model in the market, the increase in the number of positions may also cause the two -way handling fee for both parties.
In addition, two-way positions require traders to have sufficient margin. If traders add or close positions too frequently or not in time when the market fluctuates , the margin may be consumed quickly, leading to the risk of liquidation, so Users are also required to do a reasonable position management .
- Margin mode
MXC Matcha currently offers two margin modes: one -to-one and one-to- one.
In the case -by-money margin mode , the maximum loss is the initial margin and position call margin used by the position-by-money position. If a position encounters forced liquidation, the user will only lose the position margin for each position, and the available balance of the account will not be added. Users can manually add margin to enter the position of each position to optimize the liquidation price. After a margin call for a position, if the user adjusts the leverage, the previous margin call will be reset.
For the user in the warehouse-by-warehouse mode, liquidation will only lose the position margin , and the part of the funds divided is the loss limit.
In the full position margin mode , it will include the initial position margin and the available position of the full position. Using the full position mode, the user’s available loss under the full position will not be used as the margin for other full positions. Currently, it supports those who have held positions. Adjust to full position from position to position. Currently, adjustment from whole position to position to position is not supported.
The full position mode means that the user’s account has a strong ability to carry losses , which is convenient for operation and calculation of positions, and the account balance is mainly used for trading.
Risk control related systems
Since the contract with perpetual leverage property there is a higher risk, and so on down under extreme market circumstances, “pin”, “advance warehouse explosion” phenomenon in some industries has been criticized by users, so the exchange of such wind Whether the control mechanism is complete has become one of the most concerned issues for users.
- Liquidation system
Forced liquidation means that when the margin reaches the level of maintenance margin, the position must be liquidated, and all maintenance margin will be lost. When the reasonable price of matcha users touches the liquidation price, the liquidation will be triggered.
For the forward contract (U-standard contract), the liquidation condition in the position -by-position mode is when_position margin + floating profit and loss <= maintenance margin_ will occur liquidation. Without considering the complex logic such as handling fees, the calculation is as follows:
Long position: liquidation price = (maintenance margin-position margin + average open price x quantity x face value)/(quantity x face value)
Short position: liquidation price = (average opening price x quantity x face value-maintenance margin + position margin)/(quantity x face value)
In the full position mode , all available users will be used as position margin.
- Reasonable mark price
In order to avoid unnecessary forced liquidation on highly leveraged products, MXC Matcha chose to use a reasonable price marking system to avoid deviations from the price index due to lack of liquidity or market manipulation. This system sets the marked price to a reasonable price instead of The latest transaction price, the price is transparent.
For perpetual contracts, the reasonable price is equal to the underlying index price plus the basis of the fund cost decreasing over time. All automatic lightening contracts use reasonable price marking methods.
The reasonable price of the perpetual swap contract is calculated using the basis rate of the fund cost :
Funding fee basis rate = Funding rate* (Time to next payment of funding fee / Time interval of funding fee)
Reasonable price = index price* (1+ basis rate of capital cost)
For example, the BTC contract uses the geometric average algorithm to take the prices of multiple trading platforms as the source of index prices. The basic sources of reasonable prices are the spot prices of Binance, Huobi, OKEx, and Gate.io. If the spot price of an exchange deviates from the median of all exchanges by ±3%, the spot price of this exchange is calculated as the median of ±3%. The reasonable price is used for liquidation, and the reasonable price is based on the index price.
Contract related costs
Since the perpetual contract has no expiration or delivery date, it will deviate from the price of the spot and the contract. Therefore, the exchange needs to use capital fees to anchor the market price of the perpetual contract to the spot index price.
Generally, if the rate is positive, long positions will be paid and short positions will receive funding rates. If the rate is negative, on the contrary, users only need to pay or charge funding fees when holding positions at that moment. If the position is closed before the funding fee occurs, no funding fee will be paid or charged.
Since the settlement of fund costs takes a certain amount of time, any order executed within ±1 minute of the settlement time point may not be included in the fund fee swap. Funding fees are collected between users, and MXC Matcha does not charge any funding fees . The current frequency of charging funds is three times a day, once every 8 hours.
fluidity
The trading depth refers to the ability of the market to not fluctuate sharply when the price of the currency is subjected to large transactions. Sufficient and stable trading depth can protect user funds from the lack of liquidity caused by the emergence of extreme market conditions . The necessary losses can also enable users to maintain a relatively more stable transaction price and lower costs.
According to real-time market data intercepted between 15:00 and 16:00 on November 13th, the matcha Bitcoin contract market depth is basically maintained at around 6 to 10 million US dollars in both directions, and the Bitcoin market spread is stable at 0.5 USDT . The corresponding nearby pending orders are basically between 100,000 and 900,000 , and the prices of pending orders are relatively dense. The deep pending orders of the first few orders are better, and buy one and sell one are dense.
This shows that the closer the actual price a trader buys or sells to the real market price , the stronger the market’s carrying capacity, which can reduce the impact of large purchase orders on the market , keep price fluctuations within a reasonable range, and satisfy users’ expectations. Liquidity trading needs.
- “Volatility” situation
“Fluctuation (pin)” generally refers to the market fluctuations, at a certain point in time, the price quickly rises or falls, and then quickly returns to the normal price level. There are many reasons for this phenomenon. Generally speaking, it may be due to the insufficient trading depth of the exchange, or the trading system may be imperfect and unstable. A more serious situation may be deliberate price manipulation.
In order to simply measure and quantify the “volatility” of the exchange, take the 15-minute trading chart data of the MXC Matcha Exchange between 00:00 and 12:00 on November 12 as an example, we can see that the matcha has the largest spread during this period of time The value is 260.5, the minimum is 15, the average is 73.74, the standard deviation is 41.66 , and the average trading volume is 21,800.
From the intercepted data, without considering other factors, it can be simply understood that the fluctuation range from the highest point to the lowest point is about 42 USDT, and the average and standard deviation data are within a reasonable range . However, because Bitcoin fluctuates sharply during this period, resulting in a variance of 1735.69 and a relatively high degree of data dispersion.
In terms of trading volume, according to the data of CoinGecko on November 13th, the past 24 trading volume of MXC Matcha was approximately US$229 million , and the open interest was US$71.77 million. The holdings of various mainstream currencies ranked relatively high, such as MXC Matcha Exchange. In the last 24 hours, TRON and other contract holdings amounted to 13.3 million US dollars, which was once ranked first .
transaction
From the perspective of the trading direction, most users may choose simple limit orders and market orders, but some traders will carry out complex hybrid trading methods, and at the same time will seek multiple combinations by switching between different ordering methods For more flexible trading operations, the Matcha perpetual contract also provides a variety of delegation methods to meet different trading needs.
- Market order
The most basic include limit orders and market orders . Limit orders allow users to set an order price, and the order will be executed at the order price or a price better than the order price.
When submitting a limit order , if there are already orders in the order form that are better than or equal to the order price for matching, the limit order will be executed immediately at the current best tradable price. Because of the liquidity consumed in the market when the order is executed, a certain transaction will be charged as a taker fee.
When submitting a limit order, if there is no order in the order table that is better than or equal to the order price for matching, the limit order will enter the order table and wait for the transaction to increase market depth. After the order is completed, the trader will receive a certain amount of Maker fee rebate.
In addition, limit orders can also be used to partially or completely close positions and take profit limit orders. The advantage of the limit order is that it can guarantee the transaction at the specified price, but it also faces the risk of the order not being filled.
The market order will be traded at the best price currently available in the order list at the time, and there is no need to set the price yourself, so the order can be quickly filled. Although the market order guarantees the execution of the order, the execution price cannot be guaranteed because the market price may fluctuate rapidly. When traders need to enter the market quickly to capture market trends, they generally use market orders.
- Plan price limit, market price, other
The planned price limit refers to the setting of a trigger price. When the user selected benchmark price (market price, index price, reasonable price) reaches the trigger price, the normal price limit after the trigger price will occur.
The planned market price refers to the conditional order with a trigger price. When the user’s selected benchmark price (market price, index price, reasonable price) reaches the trigger price, the normal market price after the trigger price will occur.
Planned price limit and planned market price can take profit and stop loss for orders used under certain conditions.
In addition to the above-mentioned ordering methods, Matcha also provides a Maker (Post Only) strategy to place an order. This strategy will not immediately trade in the market, ensuring that users will always be Makers and enjoy being a liquidity provider Obtain the income from the handling fee at the time of the transaction, and if the order is executed with an existing order, the order will be cancelled immediately.
As well as IOC (immediate or remaining cancellation) ordering method, the order is executed immediately at the commission price or better, and the remaining part will be cancelled.
- Trading auxiliary products
As more and more mature investors and professional traders enter the crypto industry, traders also put forward better needs for auxiliary tools, product UI, visualization, etc., in order to provide users with a better trading experience and create users A friendly trading platform, Matcha also provides a variety of trading aids.
MXC Matcha contract has added multiple risk setting functions to the system in order to help traders to control profit and risk in a timely manner, including “simultaneous setting of stop-profit and stop-loss”, “automatic lightening and sorting system” and other functions. Users perform “planning commissions” “, you can set “Take Profit, Stop Loss” at the same time.
In addition, in the upper right corner of the K line of the new MXC matcha contract system, you can click “TradingView” to obtain multiple technical indicators . On the page, underlined proper nouns, as long as the mouse is pointed up, the corresponding explanation will be displayed, which is convenient for users to understand, as well as various easy-to-use and user-friendly features such as ADL light highlighting.
summary
Although the crypto derivatives market has formed a leading echelon structure dominated by several exchanges at this stage, it has not yet been finalized. The future market space is still waiting for everyone to explore. As most derivatives exchanges have entered the bottleneck of homogenization development, the exchanges themselves also need to polish their products more carefully and better serve users in order to win the praise and win in this competition. Get on a higher list.
