CoinDesk
It was on a hiking trail in Hong Kong in 2015 that BitMEX co-founder Ben Delo, walking with a derivatives trader friend called Bavik, hit on the idea that became the perpetual swap: a futures contract that never expires, anchored to spot through a funding rate mechanism. The product launched in May 2016 and within a year had made BitMEX the most liquid bitcoin market on the planet, processing $3–4 billion a day at peak.
Why it matters
Before the perpetual swap, BitMEX was running quarterly, monthly, weekly, 48-hour and 24-hour contracts side by side, spreading market maker capital across six tenors. The swap collapsed all of that into a single instrument, which consolidated liquidity, tightened spreads, and turned BitMEX's order book into the venue where bitcoin price discovery actually happened. The funding rate architecture Delo built, dynamically measured from the swap's own premium to spot over an eight-hour window, became the blueprint every major derivatives exchange now copies. He estimates the product now does $40–50 trillion a year in turnover.
Market impact
A decade on, the perpetual swap is creeping toward the heart of traditional finance. The CFTC is reportedly making room for perps under its framework, and there is speculation the CME could eventually list them on equities. For Delo, that would be the final validation of a question asked on a hillside above Hong Kong by someone tired of watching customers complain that their leveraged positions kept disappearing.
Frequently asked questions
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Who invented the perpetual swap?
BitMEX co-founder Ben Delo, on a 2015 hiking trail in Hong Kong with a derivatives-trader friend called Bavik, with the product launching on BitMEX in May 2016.
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How does the perpetual swap stay anchored to spot?
Through a funding rate, paid every eight hours between longs and shorts based on how far the swap trades above or below spot. BitMEX later switched to dynamically measuring that gap from its own order book instead of importing rates from Bitfinex.
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How big is the perpetual swap market now?
Delo estimates the product now does $40-50 trillion a year in turnover across every major derivatives exchange that has copied the architecture.
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Why did BitMEX decide not to patent the perpetual swap?
Delo says the startup chose to skip patenting and focus on building, reasoning that if the product was any good, the market would show them. It did, and competitors ended up copying the design.
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Could perpetual swaps reach traditional finance?
The CFTC is reportedly making room for perps under its framework, and there is speculation the CME could eventually list them on equities, which Delo frames as the final validation of the original 2015 idea.
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