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How BitMEX's perpetual swap helped reshape crypto trading

BitMEX co-founder Ben Delo says the product was built to remove expiry, with traders instead charged an overnight bitcoin rate.

Reported · Written up by our desk · Market Structure

CoinDesk takes readers inside the origins of the perpetual swap, also known as a perp, and how the product idea traced back to a hiking trip in Hong Kong. Co-founder Ben Delo described a months-long search for a futures contract design that would stop users from complaining that positions were being closed unexpectedly, even as BitMEX experimented with contracts that ranged from quarterly to 24-hour durations.

According to CoinDesk, Delo’s colleague Bavik proposed removing the expiry date, arguing the math would imply infinite value because a futures contract’s worth depends partly on time to expiry and carrying costs. Delo then built a practical version of the concept by charging traders an overnight bitcoin interest rate, positioned as a crypto analogue to the way finance charges LIBOR.

CoinDesk adds that BitMEX was founded in 2014 with an initial goal of serving institutional hedgers, including miners and payment firms that needed a way to manage bitcoin exposure. Delo said the exchange was intended to resemble a Bloomberg terminal and used Reuters instruction codes, but the institutions never arrived, and retail traders became the dominant users instead.

In the account, CoinDesk notes that the shift in who used BitMEX changed the trading experience, with customers moving toward contracts that behaved more like spot while still offering leverage typically associated with derivatives exchanges. The story underscores that the perp design became central to BitMEX’s rise to prominence as a highly liquid bitcoin trading venue.

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