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Huobi, OkCoin, Binance and many others do the identical thing (synthetic USD products - they literally copied Bitmex's business model) and have the same or more

Huobi, OkCoin, Binance and many others do the identical thing (synthetic USD products - they literally copied Bitmex's business model) and have the same or more volume as Bitmex. I'm guessing nobody is going after them because they have China's protection or what? Or did they go through some special regulatory process inside the US?

spurdoman77 6y ago
Maybe they do more AML/KYC?
csomar 6y ago
They all require certain ID verification beyond some balance. Bitmex doesn't, which made it popular by US customers. Also, all of them are terrible for creating a synthetic USD while Bitmex is pretty darn good for that.
- hnracer 6y ago
  Their synthetic USD is perfectly fine and I would say is better than Bitmex, Bitmex has memes made about how bad their platform is. They were just the first movers/innovators who invented the financial product and now have really good network effects. These other exchanges trade billions in notional synthetic USD per day. Some of the big Chinese synthetic USD exchanges don't require any ID verification.
  - csomar 6y ago
    Ha, we have must very different experiences then. Volatile funding rates, frequent claw-backs and thin order books doesn't make for a perfectly fine USD; but maybe it's just me.
    - hnracer 6y ago
      Huobi and Okex synthetic quarterlies are fine. Not identical to bitmex perp but pretty much the same. Clawback is a negative but so is the mex insurance fund, specific users end up paying for it (more in aggregate because the size of the fund has to be massive) through stops. Anyway who has the best synthetic isnt central to the discussion
    - askmike 6y ago
      Frequent clawback? I don't think there has been any clawback this year nor last.
- doublesCs 6y ago
  Would you like to discuss what makes a syncthetic good or bad?
  - csomar 6y ago
    1. Order book, aka enough liquidity, aka moving positions doesn't incur a haircut on your capital. 2. Funding rate stability. aka it doesn't cost much (or actually make you money) to hold the position. 3. Claw-backs, aka you don't wake up one day and find that half your collateral is gone because the market made a big move. This is a big problem especially for Okex. Basically, a synthetic USD is good if it behaves and yield like a real USD.
    - arcticbull 6y ago
      Have you considered USD? That behaves and yields like a real USD.
      - CPLX 6y ago
        Right but it doesn’t have blockchain.
      - csomar 6y ago
        Is it really hard to figure out that someone going through the hassle of managing a synthetic USD has a very good reason to do?
        arcticbull 6y ago
        Usually crime, yeah. BitMEX isn't going through all this trouble and criminal indictment avoiding KYC because people using it are super on the up-and-up and have no problem with validating their identities.
        hnracer 6y ago
        The large majority of synthetic USD trading is speculation and hedging. It's significantly cheaper to trade synthetic USD than actual BTCUSD, so 100% of traders will prefer that.

spurdoman77 6y ago

Maybe they do more AML/KYC?

csomar 6y ago

They all require certain ID verification beyond some balance. Bitmex doesn't, which made it popular by US customers. Also, all of them are terrible for creating a synthetic USD while Bitmex is pretty darn good for that.

hnracer 6y ago
Their synthetic USD is perfectly fine and I would say is better than Bitmex, Bitmex has memes made about how bad their platform is. They were just the first movers/innovators who invented the financial product and now have really good network effects. These other exchanges trade billions in notional synthetic USD per day. Some of the big Chinese synthetic USD exchanges don't require any ID verification.
- csomar 6y ago
  Ha, we have must very different experiences then. Volatile funding rates, frequent claw-backs and thin order books doesn't make for a perfectly fine USD; but maybe it's just me.
  - hnracer 6y ago
    Huobi and Okex synthetic quarterlies are fine. Not identical to bitmex perp but pretty much the same. Clawback is a negative but so is the mex insurance fund, specific users end up paying for it (more in aggregate because the size of the fund has to be massive) through stops. Anyway who has the best synthetic isnt central to the discussion
  - askmike 6y ago
    Frequent clawback? I don't think there has been any clawback this year nor last.
doublesCs 6y ago
Would you like to discuss what makes a syncthetic good or bad?
- csomar 6y ago
  1. Order book, aka enough liquidity, aka moving positions doesn't incur a haircut on your capital. 2. Funding rate stability. aka it doesn't cost much (or actually make you money) to hold the position. 3. Claw-backs, aka you don't wake up one day and find that half your collateral is gone because the market made a big move. This is a big problem especially for Okex. Basically, a synthetic USD is good if it behaves and yield like a real USD.
  - arcticbull 6y ago
    Have you considered USD? That behaves and yields like a real USD.
    - CPLX 6y ago
      Right but it doesn’t have blockchain.
    - csomar 6y ago
      Is it really hard to figure out that someone going through the hassle of managing a synthetic USD has a very good reason to do?
      - arcticbull 6y ago
        Usually crime, yeah. BitMEX isn't going through all this trouble and criminal indictment avoiding KYC because people using it are super on the up-and-up and have no problem with validating their identities.
        hnracer 6y ago
        The large majority of synthetic USD trading is speculation and hedging. It's significantly cheaper to trade synthetic USD than actual BTCUSD, so 100% of traders will prefer that.