On April 21, Singapore time, BitWell, a derivatives trading platform, successfully held an online product launch event with the theme “WE WILL DO WELL” at Jinse Finance. A number of media outlets, including Shenlian Finance, ODaily, BlockBeats, ChainNews and Mars Finance, co-hosted the live broadcast.
As an emerging trading platform focusing on digital asset derivatives, BitWell has been insisting on product innovation and therefore has attracted much attention from the industry. In this launch event, Mia, Partner of Dragonfly Capital, Lin Jiapeng, Founder of LinkVC, Mable, Partner of Multicoin Capital, Zhao Wei, CEO of TokenInsight, Tong Yang, CEO of Node Consulting, Wang Peng, Founder of Shenlian Finance, Babbitt Jia Xiaobie, Orange Code Capital partner Da Chengzi, Bcoin CMO Shi Daye, independent trader Wei Zhicheng and many other industry professionals participated in the roundtable discussion.
In this session, BitWell CEO Jeff Young gave a presentation on the platform’s industry-first IMM universal market-making incentive and MakerPal product, as well as the innovative structured options product Bull & Bear contract, both of which are now officially live.
Jeff also gave an introduction to some of BitWell’s next planned products and progress. These include the layout of the NFT field, the expansion of more external cooperation, the implementation of more platform token WELL landing scenarios, the launch of unified margin accounts and portfolio margin functions, etc.
Track Changes in Digital Asset Derivatives Exchange
With a large number of traditional institutions, represented by GrayScale, Visa, Paypal, etc., entering the digital asset space, bringing a large demand for risk hedging of derivatives, the digital asset derivatives space, therefore, is also receiving more and more attention from the industry. At the conference, Mia, Partner of Dragonfly Capital, Lin Jiapeng, Founder of LinkVC, Mable, Partner of Multicoin Capital, Zhao Wei, CEO of TokenInsight, and Wang Peng, Founder of Shenlian Finance, had a conversation on the topic of “Track Changes in Digital Asset Derivatives Exchange”.
Mia, Partner of Dragonfly Capital: Options is still a blue ocean market for overall digital asset trading, with a lot of room for growth, and we are very optimistic about BitWell’s development direction. We look forward to seeing some of BitWell’s later products explore the direction of CeFi+DeFi.
Lin Jiapeng, Founder of LinkVC: In traditional finance, the derivatives market is more than 10 times larger than the spot market, and it will not be lower than that in the digital currency space. Options are a great tool to use with unlimited gains and limited losses. Industry leaders need perfect liquidity and good pricing.
Mable, Partner of Multicoin Capital: The digital asset derivatives market is very broad and options will be a very important track in the future as the market gets deeper and the volume of capital gets larger. The bar for options exchange is higher, so the answer to whether there is a leader in the future is yes. The ability to design for local user preferences, including portfolio options products, is also one of the keys to gaining mass adoption.
Zhao Wei, CEO of TokenInsight: Options have a high threshold, which is actually difficult for ordinary users, and the industry currently needs more basic user education and more products that are simple to operate and understand. I am optimistic about the development of the options market this year. The most important thing to become the industry leader is still in the product itself, followed by the ability to acquire customers, including user education and other aspects.
Wang Peng, Founder of Shenlian Finance: Compared to other investments, the digital currency market has been more volatile, and the high volatility magnifies arbitrage opportunities as well as investment risks, thus attracting a large number of investors to enter the digital currency market. The financial derivatives of digital currencies, to a greater extent, meet the risky investment preferences of some investors who want to pursue the ultimate arbitrage. For professional investors, it is indeed a 365 x 24h investment haven. The options industry, on the one hand, needs to be professional and stable, and on the other hand, because of its high degree of professionalism, it needs to do its best to be simple and easy to use, so that more ordinary investors can also use it. The future options leader will have to find a very delicate balance between the two, and it seems that BitWell has made a lot of attempts in this so far, and has achieved good results, so I hope BitWell can get better and better in the future!
Strategies and Experiences for Derivatives Traders in a Period of Cryptocurrency Turmoil
Among the new products released by BitWell today, Bull & Bear Contract, an entry-level options product for novice traders, will bring something different to the experience for new users.
The new highs in Bitcoin have been reached again recently, and now it is entering a retracement phase, so what should we do as investors in such a volatile market? Orange Code Capital partner Da Chengzi, Bcoin CMO Shi Daye, independent trader Wei Zhicheng and Babbitt Jia Xiaobie shared some of their insights and experiences on this topic ‘Strategies and Experiences of Derivatives Traders in a Period of Cryptocurrency Turmoil’.
Orange Code Capital partner Da Chengzi: Arbitrage is no directional position exposure, but there are some inherent risks, such as exchange API disconnection, trading variety liquidity shock resulting in the inability to close positions, unreasonable position control resulting in excessive leverage, etc., need a professional team to fine tune the process. Some time ago, a simple funding fee arbitrage could yield good returns, and the funding fee basis differential has been largely eliminated or even negative basis differential has emerged after this wave of crash. However, we can also note that this big drop will widen the basis difference between the various exchanges, which may be an opportunity for cross-shelf arbitrage, and the rise in volatility may also be an opportunity for options volatility statistical regression arbitrage.
BCoin CMO Shi Daye: Options are an immediate need for risk hedging in mainstream coins, and can also be used to combat high funding rates. Traders prefer a portfolio product that facilitates the free allocation of our capital. For effective spot-contract arbitrage, it is perfectly fine when the market is highly volatile, but requires sufficient acumen. From a risk-averse point of view, options are similar to insuring one’s own order for proper risk segregation.
Independent trader Wei Zhicheng: Cryptocurrency derivatives have increased the freedom of traders, especially for professional players. More diversified derivatives options will facilitate a relatively more level playing field in the market, such as by diluting the unfair advantage of some simple and brutal contract play ’needles’, but for now cryptocurrency derivatives are still a simple copy of traditional financial derivatives. The fact that cryptocurrency-related products are more rapidly programmable and tend to think out of the box is a core strength of the cryptocurrency community. This may be an opportunity to incubate derivatives that are difficult to achieve in traditional finance, such as more innovative cross-market trading, a more friendly product experience for non-specialist players, or even to bridge traditional finance on this basis, thus forcing the traditional financial market to feel the competitive pressure. Competition leads to progress, which is the logic of Yang and Yin to check and balance each other and to stimulate each other to accelerate development.
Conclusion
In 2021, along with the successful listing of Coinbase, the digital asset exchange circuit will see greater development, and the derivatives sector is expected to see further explosion.
BitWell has always been based on the derivatives market and insists on starting from the perspective of lowering the threshold for users. The launch of IMM, MakerPal and Bull & Bear Contract is a new starting point for the platform.
In the future, BitWell will continue to keep up with the changes in the industry, keep innovating and bringing more, simpler and richer derivative products to users.
Attachment:
Speech by BitWell CEO Jeff Young
Hello, my name is Jeff and I would like to thank everyone for coming to the launch of BitWell’s new product. Thank Jinse Finance, BlockBeats, Shenlian Finance, ODaily, ChainNews and Mars Finance for their support.
BitWell is an international digital asset derivatives trading platform, aiming to provide a wide range of digital asset derivatives trading services to users worldwide, in order to jointly promote the development of the blockchain industry and achieve the free flow of value.
The blockchain and digital asset industry is now in the fast lane of booming development. With the continuous entry of a large number of traditional institutions, it will bring about a huge demand for digital asset derivatives. In 2021, whether it’s futures or options, the digital asset derivatives market is poised for huge growth.
Recently, the new highs in Bitcoin and the official listing of Coinbase have shown us that, as the first traffic portal between digital assets and the general public, trading platforms are playing a basic, but increasingly important role in the industry. Therefore, how to provide a richer and simpler product for the majority of users has become a top priority for us.
Since its inception, BitWell has always been based on the derivatives market and insisted on starting from the perspective of lowering the threshold for users. Whether the innovative launch of Simple Options and DeFi Options, or the platform token yield farming that kept up with the market, as well as BitWell Savings, all of which have been recognized by community users.
Over the past two months, BitWell has also continued to expand its cooperation areas such as DeFi. The platform has reached in-depth cooperation with projects such as Aave, ForTube, DODO, ZKSwap, Alchemy Pay, Mask Network, DEGO and so on. Additionally, BitWell platform token WELL has been used as a cross-chain asset to access BSC and expand BSC on-chain application scenarios.
Of course, this achievement is not enough.
In the future, BitWell will continue to make efforts in external cooperation, including DeFi, NFT and other areas. At the same time, there will be more WELL application scenarios landed, please look forward to it.
On the other hand, I would like to mention that BitWell has always taken user experience as its core goal, and our underlying architecture is developed by our team. The architecture is designed with a long-term plan for many aspects such as average response time, throughput, and future scalability since the early stage. We not only focused on the current business volume, but also prepared for the rapid growth of data volume and user trading requirements in the future. What we are preparing for is not a trading volume in the tens of millions, we are aiming for a multi-billion trading volume in the future. This is why you can see that since its launch, the platform has never had a single congestion or downtime incident, also users are safe and worry-free when trading with BitWell.
From 2020, decentralized exchanges, represented by Uniswap, drove the strong growth of the AMM (automated market maker) model. The widespread of AMM has brought an explosion in the depth of DEX trading, even surpassing many large traditional trading platforms at one point.
Some of our community users, after experiencing AMM, have given us feedback that they hope we can also introduce a mechanism like transaction fee dividend model so that users can get more benefits through trading.
We have also been studying and thinking about how we can attract more ordinary users through innovative mechanisms to become liquidity providers while using order books for trading.
On the other hand, many users who use AMM have reported that the most frustrating thing is the existence of impermanent loss in AMM model, which makes these users get dividends while the mainstream coins such as ETH that should belong to them are forced to exchange for extremely risky Altcoins, and many times the gains do not make up for the losses.
So, BitWell team took inspiration from AMM’s transaction fee dividend model and combined it with the traditional order book model to innovate a new mechanism, IMM, which is what I will introduce to you next.
IMM is the abbreviation of Incentive Market Maker. Based on IMM, we have launched a brand new product, MakerPal. Users who place orders through MakerPal will receive a subsidy incentive, regardless of whether orders are filled or not.
One big innovation here is that even if your pending orders are not filled, you can still get certain incentives, the principal will be fully refunded and a 30% APY on the principal amount will be compensated; If your order is filled, you will get 0.01% of the filled volume as maker incentive interest, and all incentives will be distributed immediately. Not like AMM, where incentives only come with filled orders. Also, there is no so-called liquidity pool, and users will not need to put tokens such as ETH into the pool, so there will be no impermanent loss.
At the same time, due to the existence of incentive mechanism, users’ pending orders will also reflect to the market, which can effectively promote the growth of liquidity; the increase of liquidity can essentially promote users to more actively place pending orders and gain incentives. Thus, a productive positive cycle is formed.
IMM here has two layers of meaning, not only Incentive Market Maker, but also ‘I, Market Maker’. We hope that every user can become a liquidity provider and enjoy additional dividends while trading.
As mentioned above, it is a distinctive feature of our IMM mechanism innovation to provide subsidy incentive for unfilled orders. Moreover, with such a 30% APY, you can actually calculate and compare the subsidy income obtained through MakerPal, which is quite high in the industry. For example, if you put BTC into a financial product to manage your assets, there is only 6% APY for one year.
In addition, users can receive 0.01% of the transaction amount as a commission subsidy incentive, which is open to all users. And in contrast to the current industry, only institutions, big customers, market makers and so on, are likely to receive subsidies from the trading platform, while ordinary retail investors simply cannot have. So this incentive will be a great benefit for ordinary users, and there is no impermanent loss, letting users use it with peace of mind.
We hope that through IMM’s MakerPal, we can drive more ordinary users to come in and become liquidity providers together without having to use complex wallets or understand complex pledged LPs, achieving a win-win situation with the platform.
Let’s summarise the features of the MakerPal product under the IMM mechanism:
1. 30% APY compensation for unfilled orders, and no need to worry about pending orders.
2. Incentives are also given for filled orders and are open to all users.
3. The traditional order book form has been changed.
4. No impermanent loss, no need to worry about assets losses.
So we just introduced a brand new product, MakerPal, which is a derivative product based on spot trading. Next, we bring you a new derivative product.
For derivatives, we currently have options and perpetual contracts online, in addition to our financial products, BitWell Savings. As the main product, options are still our top priority.
Those who are familiar with BitWell know that the platform is using options as a breakthrough for the whole derivatives. In terms of product lines, we have T-quotes for institutional and professional investors, as well as Simple Options for ordinary users; in terms of varieties, BitWell is also the platform with the most varieties of options at the moment.
Recently, the market has been very volatile and contracts have been bursting frequently, while the advantage of options not bursting has become more and more prominent. However, through the feedback from users over the past six months, there are still some users who still do not know much about options, especially there are many users who have not been in contact with options at all and wish to experience and understand options, even Simple Options is slightly difficult for them. For example, in how to choose the leverage multiplier and when it is appropriate to close the position.
On the other hand, for spot trading, the revenue cannot meet their needs. So this prompted us to develop a brand new options product — Bull & Bear Contract.
Bull & Bear Contract is a simpler, shorter-cycle European-style option. Once again, Bull & Bear Contract offers users a lower barrier to use, as well as a higher degree of flexibility.
Currently only BTC and ETH are supported. To use it, all you need to do is select the coin, decide on a 30-minute or 4-hour period according to the market trend and choose to buy long or buy short. Since the time is fixed, users don’t need to keep an eye on the market all the time after placing an order, just wait for the expiration and settlement.
Bull & Bear is the equivalent of a real-time parity option, cheap, requiring only short term net change to be judged, while having the advantages of an option: no position blowout. Even if there are sharp fluctuations in the short term market, there is a chance to turn around before the expiration of the option. Therefore, users who have no knowledge of options at all can easily get started with the experience.
Bull & Bear Contract eliminates the need for users to choose for leverage, and it is simpler and more flexible since there is no need to spend time reading the tape and thus no need to worry about when positions should be closed.
The characteristics of Bull/Bear Contract:
1. Provide adequate liquidity.
2. It is an options-related product, so position will not be liquidated.
3. Cheap.
4. Short period, fast and more flexible.
5. Easy to understand, as long as the expiration index price exceeds the breakeven point, it is profitable.
Okay, so the above is the introduction of the two new products brought by BitWell: the industry’s first IMM market making incentive mechanism and MakerPal, as well as the structured options product Bull & Bear Contract.
At present, both MakerPal and Bull & Bear Contract have been officially launched, and users can directly log on to BitWell’s official website or Android APP to experience them. In addition, IOS version will be launched soon.
Moreover, within the first month after the launch of these two new products, BitWell will temporarily offer zero-fee trading for them, so we welcome you to experience them enthusiastically and also hope you to give us more valuable comments on the products to jointly promote the progress of the products and the platform.
In conclusion, I would like to give you a brief overview of BitWell’s following plans.
1. NFT-related layout
In recent times, NFT, an emerging method for digital artwork and other media products, has become a craze in the crypto space. The uniqueness of NFT, and its irreplaceable nature, are changing the way we buy and sell goods in the digital space.
As such, BitWell will also lay out its presence in the NFT space, and the platform will work extensively with well-known projects in the NFT space such as DEGO, Treasureland, Rarible, BCA and more to build the NFT ecosystem.
BitWell will set up a $10 million NFT fund to support and invest in NFT projects, helping to incubate more quality NFT projects in terms of marketing, operations, trading, etc., as well as promoting the development of the NFT market.
Previously, BitWell reached cooperation with BSC and has gone live with BSC Asset Zone, also WELL has been used as a cross-chain asset to access BSC; later, we will also launch the corresponding NFT section and zone, so stay tuned.
2. The increase of WELL eco-application scenarios
With the enrichment of BitWell’s product line and the cooperation with more and more projects, the ecological application scenarios of WELL are also being enriched. For example, we have already supported the use of WELL as a hybrid margin for perpetual contracts; WELL will soon be able to access overseas payment channels such as Visa, Paypal, etc.; it will be launched on ForTube, and users will be able to use WELL to borrow and lend directly on ForTube, etc. Moreover, there will be more cooperation in the future, bringing more application scenarios.
In addition, WELL’s fee discounts, fee credits and other features will be available soon. With regard to MakerPal and Bull & Bear Contract, we will add the use of WELL as MakerPal incentives, or WELL can be used directly for Bull & Bear Contract settlements, etc.
3. Simple Options will see a revamp and upgrade
Simple Options is the first options product we launched, and the first in the industry to lower the threshold of options participation for the ordinary users. Over the past six months, we have received a lot of positive feedback from our users, and we are currently in the process of revamping and upgrading Simple Options to bring a better experience to them. The new version will be available soon, please look forward to it together.
4. On-line Unified Margin Account and Portfolio Margin Function
Currently our options and perpetual accounts are separate, we will unify our margin accounts so that users can trade options and perpetual products at the same time using one account, which will effectively improve capital utilisation and enhance trading efficiency.
In addition, we will also launch the portfolio margin function, which can effectively improve the utilisation of users’ assets, allowing them to open more positions with the same amount of margin, without leading their risk tolerance to decrease, and facilitating them to build more different investment portfolios.
5. Bull & Bear Contract will also subsequently support more varieties, as well as add more time periods.
6. BitWell will continue to expand its external cooperation to bring more and better projects to users. At present, we have signed memoranda of cooperation with a number of famous foreign institutions and are in the process of technical docking. They will soon be stationed on the platform and users will then be able to see richer trading scenarios in BitWell.
7. At present, the platform has burned over 27.78% of the total WELL, with a total value of nearly USD 300 million. In the future, BitWell will conduct a community vote and plan to burn more WELLs, allowing all community users hold WELLs to decide the process and proportion of destruction.
Well, these are BitWell’s product plans for the coming period. We will continue to maintain innovation, keep pace with the industry, and even create a new trend in the industry to bring more, better and more convenient products to our users.
Finally, thank you all for joining us at BitWell’s launch event today!
