The perpetual contracts will be created based on standard, simple contracts and the USDT stable coin will be used for settlement and margins. The contracts will have a high leverage capacity of up to 150 times their price for the chosen cryptocurrency trading pair.
Crypto perpetual contracts allow you to bet on the cryptocurrency price in relation to another currency. The difference from fixed maturity futures is that perpetual contracts have no fixed dates. Blade currently supports seven different cryptocurrency pairs for perpetual contracts.
“In the long term, we want to be the CME of crypto… Coinbase and Binance are building this foundation structure for crypto, but I think we are too and in a sense that derivatives are at their core about risk transfer, we want to be building the foundational layer for risk transfer in the crypto markets,”- stated the CEO of Blade CEO, Jeff Byun.
Although most of Blade’s investors are from Silicon Valley’s VCs, U.S.-based investors will not be able to legally trade on the upcoming exchange. Blade is actually based offshore with its main market in East Asia, having only a subsidiary in the U.S.
“It’s kind of a bifurcated market,” said Byun in an interview. “Either you have exchanges like Coinbase or Gemini or Bitrex that cater to the U.S. market that are highly regulated or the exchanges that cater to the non-U.S. market that are much less regulated, but that’s where most of the volume is.”
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