Bitfinex, a crypto exchange that has been operating since 2012, today announced the launch of perpetual derivatives contracts for Filecoin and Avalanche. According to a company note, the new derivatives offer users leverage of up to 100x and will be settled in Tether (USDt) tokens.
Filecoin and Avalanche on Bitfinex’s iFinex
Paolo Ardoino, CTO of Bitfinex Derivatives, said:
“We’re delighted to announce the addition of Filecoin and Avalanche to the growing portfolio of perpetual swaps available to trade on the exchange”.
“We anticipate great interest in these products, particularly among funds and professional investors for hedging purposes and to manage risk”,
said the platform’s statement this morning.
The products will be available on the iFinex Financial Technologies derivatives platform, a digital token trading platform launched by Bitfinex in 2019.
Bitfinex had already launched a derivative on Dogecoin in May this year, having previously launched similar contracts on Bitcoin, Ethereum, Eos, Polkadot and Litecoin.
Crypto derivatives is a growing market
The market for cryptocurrency derivative contracts, which bet on the future value of an underlying asset, in this case a crypto, has been booming in recent months. According to some figures, there are currently about 100 billion dollars worth of derivatives traded.
A recent study by the Carnegie Mellon University CyLab in Pittsburgh, Pennsylvania, also confirms the fast-growing trend, according to which
“on average, the traded volume in cryptocurrency derivatives markets exceeds the regular crypto spot markets by a factor of five”.
Derivatives are instruments that are usually used to hedge against the risks of high price volatility, which is why products linked to cryptocurrencies are enjoying great success.
But this, according to researchers at the American University, would mainly protect large investors, while putting small investors at the mercy of the forced liquidations that occur when traders are unable to undercut margins to hold positions in crypto derivatives. In April, for example, Bitcoin futures saw a record $10 billion in contract liquidations in a single day.
This resulted in a 15% collapse in Bitcoin prices.
Filecoin for peer-to-peer storage
Filecoin is a decentralized, cloud-based network dedicated to data storage, which allows its users to receive rewards by selling excess storage space on an open-source platform. FIL tokens are used as payment for these services and as an economic incentive to ensure that files are reliably stored over time.
All developers can rent storage space, similar to traditional cloud storage. But instead of entrusting files to a single provider, they are shared and serviced by a globally distributed network of computers. In a short time Filecoin, which was born in 2017, has grown a lot in value becoming among the top ten cryptocurrencies by capitalization.
Arousing growing interest in the coin is the yield that Filecoin mining offers compared to other cryptocurrencies, which is why China has become the most promising market.
What is Avalanche
Avalanche is a hub for decentralized applications on the blockchain. As it simultaneously processes thousands of transactions per second, it seeks to be a viable alternative to the too-slow transaction times of the Ethereum network, because it uses a new consensus proof-of-stake mechanism to achieve high throughput, estimated at over 4500 transactions per second.
And investors seem to be increasingly believing in the project, as Avalanche’s price tripled in August.