Development status of contract exchange

Time:2020-4-19

With the rapid development of digital currency in the global traditional financial market, the development of digital asset exchange can be described as ups and downs, gradually moving towards the road of contract exchange, then what is the overall trend of the market development of contract exchange? What are the difficulties of the development of contract exchange? Let’s take a look at it next.
Development status of contract exchange
  1、 Development of contract exchange market
At present, the overall development trend of contract market presents the situation of “gradual development and centralized detonation”. This is not only because the market scale advantage is outstanding at present, but also because of the high threshold of contract transaction. The transaction depth, system stability and risk control mechanism are indispensable for the contract platform.
As a service provider of the trading market, the contract exchange takes the transaction fee as its core business model, and safeguarding the asset security of traders is the core indicator to measure the technical strength of the exchange. However, due to the objective factors and malicious acts, there are frequent occurrence of stock explosion events, pin insertion events, chain stock explosion events and stock penetration events caused by clearing of large positions, which is that the contract trading platform itself has mechanism defects, as well as technical injuries.
2、 Difficulties in the development of contract exchange
First, technology is hard. Generally speaking, most of the contract trading platforms have technical problems, which is also the difficulty of contract trading. Matchmaking performance, scalability, stability, API speed limit, and digital asset security are all technical issues that need to be further explored by the trading platform.
Second, users’ digital assets are easy to be stolen. The frequent theft of users’ digital assets is also a big problem in the digital money market. Hackers obtain a large number of user API passwords, phishing, virus attacks, and even senior hackers can invade the system of the trading platform and steal user assets without triggering the conventional risk control warning. In March 2018, July 2018 and may 2019, “black swan event” happened in the trading giant, Qian anfanfan, is a typical representative of such events.
Third, the defects of the mechanism are easy to cause the contract price to be manipulated and the user’s share is unfair. In general, the contract of short position will be forced to close by the trading platform. After the forced closing, when the user’s position margin is less than the position loss, the loss of short position will be caused. In order to make up for the losses, most trading platforms will use social loss sharing mechanism to share the total contract losses to each profit account in proportion. Even, some exchanges will maliciously wait for the user’s position breaking point, pull the price to the position breaking price and turn around, that is, the so-called “fixed-point position breaking”. The unreasonable mechanism setting and the unstable performance of contract products affect the liquidity and depth.
 3、 How to solve
First, asset security incidents occur frequently, and the contract trading platform with higher technical requirements needs to provide effective security protection measures. If there is a decentralized asset custody scheme in the industry, it may change the market pattern.
Second, enrich the service content, open the contract business, meet the technical requirements of opening the contract transaction for major needs, so that more exchanges can open the contract service, and stimulate the creativity of the industry through benign competition. In order to change the defects of the mechanism, the chain soft network introduced the perpetual contract mechanism in the development process of the exchange, in order to reduce the outbreak of vicious events from the mechanism.
If the contract exchange wants to develop, it needs to establish and improve the digital currency derivatives system through the underlying structure, technology, user base and other aspects in the future, reduce the contract risk of the digital asset exchange, and gradually build a standardized, scientific and rational industry standard.

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