Since the end of 2018, the spot market for cryptocurrency has been in the downturn. In the face of such weak market conditions, many exchanges have been working hard on launching contracts in a way to increase their profits while providing investors with more convenient tools, and each of these exchanges boasts his strong points. Based on the public data, this article makes a comprehensive rating of the five popular exchanges from the aspects of contract market share, professional degree, risk response capability, profit size, and user experience.
1. Contract Market Share
According to a research institution, data shows that more than 80% of exchanges offer perpetual contract services. Of all the exchanges that providing such service, 57% have both regular contracts and perpetual contracts. It can be seen that the perpetual contract is a trend, and features such as no delivery expiry date and high leverage are more popular among users.
58COIN has realized the importance of the contract since its establishment. In May 2018, when other trading platforms were still engaged in ICO, 58COIN has already taken the lead in launching the 100x perpetual contract in Asian regions. By the end of 2018, it’s market share in perpetual contracts has soared to the top in Asia. As of now, 58COIN is still at the head of the contract market.
Except for Bitmex and 58COIN, other exchanges began to focus on launching contract services at the end of 2018. At the beginning of September, Huobi Global announced that the platform contract trading volume and depth ranked first in the world, resulting in refuting by OKEx and the further revealing of the inside stories between the two sides, which caused a stir to the cryptocurrency realm in the weak market condition.
2. Professional Degree
Can the exchange ensure the security of the trader’s account funds and information? Is there a security service provider? The verification mechanism and fund storage system of the platform are mostly concerned by investors. At present, the exchange’s technical development experiences are uneven. Some may have a limited system carrying capacity when extreme market conditions occur, for example, Huobi Global often have downtime accidents. The high-speed transaction matching engine developed by 58COIN can carry tens of thousands of transactions per second, ensuring fast and secure transactions.
3. Risk Response Capability
When the sudden change of the market occurs, investors who use leverages in contract trading are prone to be liquidated or even suffer debt loss. Rules of “who should bear the debt loss” among different exchanges vary, for example, OKEx set that the full account users should bear all the loss; 58COIN has a self-owned risk reserve of more than 2 billion Yuan and all the debt loss will be covered by the reserve. Additionally, both Huobi Global and OKEx have set up the reserve funds, instead of preparing by the platform, 100% of which is collected from the “profit” generated by the investor’s liquidation.
4. Profit Size
Profit is a key factor that determined the normal operation of a platform. Although popular exchanges have not disclosed their profitability, we can estimate the profits of OKEx and Huobi Global through repurchasing of the token or dividends. Bitmex is a long-established contract exchange, data from Feixiaohao showed that its 24h trading volume is 10.4 billion Yuan. If the fee rate is calculated according to 0.04%, only the quarterly fee income is nearly 1 billion Yuan.
5. User Experience
The importance of users to the digital currency trading platform is self — evident, and retaining users is the key to the development of each platform. Users will leave if the experience is not good. Since exchanges like OKEx, Bitmex have been established for a long time, a large number of spot users can easily become the contract users, buy in terms of active users, the above two exchanges have exposed the shortcomings.
As of now, 58COIN contract products have got more than 400,000 registered users, and the daily active users have exceeded 110,000. Although the amount of users is smaller than that of Bitmex and OKEx, active users are fundamental to the development of the platform. The above results are attributed to the simple user transaction interface, comprehensive market display, depth and K-line analysis interface, and 7*24h online support with quick response.
In a word, the 58COIN exchange has allowed retail investors to make profits, and thus attracted more investors. Whoever wins the hearts of users will retain the users. Catching the market, be a rule maker or as the first participant.