Crypto and derivative exchange platform BitMEX announced it plans to roll out a Tether-margined ETHPoW futures contract on Aug. 9, the company wrote in a blog post. According to the announcement, the new coin will allow BitMEX users to gain exposure to ETHPOW with up to 2x leverage.
BitMEX’s New ETHPoW Futures Contract With Up to 2x Leverage
BitMEX, a cryptocurrency exchange, and derivatives trading platform, recently published a blog post saying it will launch a USDT-margined ETHPoW futures contract, dubbed ETHPOWZ22, on Tuesday. The move comes several days after the company’s research team considered a split chain in Ethereum that could create a new ETH Proof of Work (PoW) coin.
“Just a few days ago in ETHPoW vs ETH2, the BitMEX Research team explored the possibility of a chain split in Ethereum that could result in a new ETH Proof of Work (PoW) coin. Fast forward a few days, and there’s about to be a new way for users to trade – in respect of ETHPoW with ETHPOWZ22 scheduled to go live tomorrow.”
After the launch, the new coin will enable BitMEX users to trade ETHPOW with up to 2x leverage, the crypto exchange added in the blog post. At the moment, the coin is available only on the Testnet.
BitMEX described the new coin as a “highly speculative contract” and because of that, the crypto exchange made several important changes that make ETHPOWZ22 different from other futures contracts listed on the exchange. One of these changes is the Last Price marking as there is not yet “an observable price for ETHPOW.”
“To protect the market against manipulation, we will use Limit Up and Limit Down prices which are set each hour, on the hour, at Mark Price +/- 20%. Traders will not be able to place bids above the Limit Up Price or place offers below the Limit Down Price.”
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The Merge Draws Near
BitMEX’s decision to launch a new ETHPoW futures contract comes roughly a month ahead of the provisional date for the long-awaited Merge. The Merge is without a doubt the most highly anticipated development for Ethereum as it will transition the world’s second-largest cryptocurrency from proof-of-work (PoW) to a proof-of-stake (PoS) network.
This transition is expected to cut Ethereum’s energy use and carbon emissions by 99%, which would tackle one of the blockchain’s key critiques. In mid-July, a key Ethereum developer suggested a provisional date for the Merge for September 19. Ethereum has been seeing a significant jump in its derivatives activity lately as investors continue to bet on Ethereum ahead of the Merge
In a previous blog post published earlier this month, BitMEX explored the possibility of a chain split when the Merge happens, which would create an ETH2 coin and a fresh ETHPoW coin. The blog post analyzed the viability of the ETHPoW chain, which BitMEX argues could provide an appealing opportunity for short-term and mid-term crypto investors.
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About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.