Today, the crypto and derivatives exchange announced its plans to roll out a Tether-margined ETHPoW futures contract. According to the announcement, it will go live on 9 August, and the new coin will allow BitMEX users to gain exposure to ETHPOW with up to 2x leverage
BitMEX Is Stepping Into The Traditional Crypto Financial Space
Crypto-related projects have started indicating whether they will support Ethereum’s transition from a Proof-of-Work (PoW) mechanism to Proof-of-Stake (PoS) dubbed “The Merge,” as well as a possible fork of the network.
BitMEX is one of the dominating cryptocurrency exchanges and derivatives trading platforms. Recently the company published a blog post announcing its launch of a USDT-margined ETHPoW futures contract, dubbed ETHPOWZ22. This move came out several days after the company’s research team went through ETHPoW vs ETH2 and considered a split chain in Ethereum that could create a new ETH Proof of Work (PoW) coin. According to the team, a potential Ethereum (ETH) PoW split chain may be compatible and functional in the network but would have substantial issues to resolve along the way. Let’s quickly look at the contract details.
|Expiry Date||30 December 2022|
|Contract Size||0.00001 ETHPOW|
|Minimum Trade Amount||0.01 ETHPOW|
|Base Initial Margin||50.00%|
|Base Maintenance Margin||25.00%|
|Price Limits||+/- 20%|
Ethereum’s Game-Changing Module
The new coin (USDT ERC 20) will enable BitMEX users to trade ETHPOW with up to 2x leverage after the launch. The coin is now available on testnet for preview.
BitMEX referred to the new coin as a “highly speculative contract.” To give this coin a unique perspective, the crypto exchange made several important changes to ETHPOWZ22 to make it different from other futures contracts listed on the exchange. ‘Last Price’ marking is one of these changes as there is not yet “an observable price for ETHPOW.”
The .BETHPOWT index will be developed by BitMEX, and it is possible to produce a robust index that represents the spot price of the ETH Proof of Work Coin. BitMEX may change the Mark Method to Fair Price once the index is developed. The value of .BETHPOWT will be set to 0 until it is established on the network. If no index is constructed by the expiry date, the Settlement Value will become 0.
BitMEX stated, “To protect the market against manipulation, we will use Limit Up and Limit Down prices which are set each hour, on the hour, at Mark Price +/- 20%. Traders will not be able to place bids above the Limit Up Price or place offers below the Limit Down Price.”
An Innovative Way To Power Ethereum
The Merge is the much-expected moment for crypto enthusiasts when Ethereum transitions from proof-of-work (PoW) to proof-of-stake (PoS). But the PoW miners were not looking forward to it, so the team looked into the viability of a chain that would continue working on the PoW mechanism. The team said, “it may provide an exciting opportunity for traders and speculators in the short to medium term.”
BitMEX’s analyst team said, “Although there are many technical challenges that ETHPoW faces, as long as the chain survives, it looks likely that there could be positive narratives around the coin and leading centralized exchanges are likely to list it.”
Furthermore, Poloniex and OKX declared support for Ethereum Forked Tokens. This is a highly anticipated development for Ethereum’s future journey as Ethereum is currently trading around $1700 after falling from its all-time high of $4800. In mid-July, a key Ethereum developer suggested a provisional date for the Merge on 19 September. Ethereum has seen a significant jump in its derivative activities lately as investors continue to invest in Ethereum ahead of the Merge.