A continual futures contract for Zcash (ZEC)–Tether (USDT) pair was launched by Binance, with a leverage of up to 50x. In this regard, an announced from the exchange disclosed that trading in ZEC/USDT futures contract will begin at 8.00 am on February 5.
In order to avoid market rigging, in the first 15 minutes after trading begins, Binance will implement a price limit of ±1% on the base price.
When Binance rolled out its futures platform, with a leverage of up to 125x, the exchange stressed that it will put traders in touch with an insurance fund that can possibly assist in preventing the possibility of auto-deleverage.
Regarding the response for the platform CEO Changpeng Zhao stated that the futures platform has attracted considerable institutional players, with professional traders increasing the need to provide methods to process transactions quickly.
Contrary to a conventional futures contract, continual or perpetual contracts have no expiry or settlement date. Binance has pointed out that price differences between spot and futures contract can be likely magnified depending on the expiry time of a conventional futures contract.
In case of perpetual contract, the price variation between the spot and futures market is considerably reduced as explained below:
“The perpetual contract is an attempt to take advantage of a futures contract […] while mimicking the behavior of the spot market in order to reduce the price gap between the futures price and the mark price. This is a marked improvement compared to the traditional futures contract, which can have prolonged or even permanent differences versus the spot price.”
Notably, Binance has roped an executive from its competitor Huobi. Josh Goodbody, ex-head of Europe and Americas as Huobi, has been appointed as director of European and Latin American growth and institutional division.
Apart from futures contract, Binance has taken initiatives to expand globally and is increasing the range of cryptocurrency investment options. The exchange is working to bring staking reward facility in its US platform this month. Notably, the platform was launched at the end of September 2019.
