2020 Dec USDT Perpetual Contract Research Report

Executive Summary:

1. Compared with inverse perpetual contract, the USDT perpetual contract is more easy to understand and calculate, and relatively less risky.

2. For the USDT perpetual contract, mainstream exchanges often adopt a four-stage risk control system designing methodology of "margin-leverage-liquidation mechanism-risk sharing mechanism". As the market matures, the risk control ideas of USDT perpetual contract product will develop along the two paths of "refinement" represented by Huobi and "simplification" represented by BitZ.

3. USDT perpetual contract products has occupied half of the crypto derivatives market, and the distribution of market trading volume is currently in a situation of "one great power and multi-great power”. Besides, the leading exchanges lack competitors, which indicates the possibility of monopoly.

4. BTC/USDT perpetual contracts account for the absolute mainstream of the market, and the number of contract varieties is positively correlated with the exchange’s share of the market trading volume. Increasing the number of contract varieties and enriching the product line will help enhance the exchange’s competitiveness in the USDT perpetual contract market.

5. Compared with inverse perpetual contract market, the USDT perpetual contract market has a relatively low liquidity score. The reason may be related to the different risks and returns of different types of contracts.

6. In terms of market depth, among the current mainstream USDT perpetual contract exchanges, Binance, Bybit, and Bitget’s BTC/USDT perpetual contracts have better liquidity, and FTX, OKEx, and Huobi’s ETH/USDT perpetual contracts show good performance. 

7. In the future, the exchanges will modify the USDT perpetual contracts from the perspective of risk control mechanism and product operation, and may combine the advantages of inverse perpetual contract and USDT perpetual contract to launch hybrid contract products.