Singapore-based cryptocurrency derivatives exchange Phemex, has rolled out a proprietary perpetual contract pegged on gold and settled in nominal USD that they say is the first GOLD/USD perpetual contract that can be traded with up to x100 leverage.
It is pegged price-wise by the combination of several indexes: 1Forge.com (40%), GoldPrice.com (20%), itBit.com (15%), Bitfinex.com (15%), and Kraken.com (10%).
Phemex’s CEO Jack Tao commented:
“This is just the beginning for non-crypto assets on the Phemex platform, the roadmap for 2020 includes stock indexes, interest rates, FOREX, commodities, other metals, and energy resources.”
“Considering Bitcoin’s recent volatility, the Phemex team has introduced this novel product in order to help their users hedge their risk with as many options as possible.”
Each contract is worth 0.001 troy ounce of gold and they say the index is updated and published every second. If any of the sources disconnects, it will be temporarily removed from the calculation until a connection can be re-established. The weight of the disconnected source will be proportionally reallocated among the remaining sources.
Perpetual contracts trade at close to the underlying market price for bitcoin, because of a funding mechanism that requires long and short contract holders to exchange payments every eight hours.
While various crypto exchange platforms have shown an increased interest in the derivatives market, the Phemex powered derivatives platform is one of a kind, as it is designed to be the world’s most trustworthy with a fully transparent, fair pricing mechanism matched with unrivalled speed and the fastest matching engine available.