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Perpetual futures, explained

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Re: Perpetual futures, explained

#71

Post by awesome_dude »

immibis wrote: post #56
awesome_dude wrote: post #9

Earlier quoted context omitted.

I mean, as soon as synchronisation is required in any system, block chain, distributed SAAS, even Peer to Peer sharing, decentralisation fails hard That's one of the sticking points I have with the /idea/ of the technology

Ethereum and similar chains run arbitrary computation on-chain. You can make a futures exchange on Ethereum (or Solana, etc). However, the fees for doing so are very large, and confirmation times are very long, like any other on-chain transaction.

What I am loving about this comment, and the downvotes, is the idea that blockchains can escape things like basic laws of the universe.

> confirmation times are very long, like any other on-chain transaction

Yes. synchronisation is where everything breaks down because you have to get everyone to agree to the new state.

edit: Sorry, not everyone, but a consensus, and that consensus is then what everyone agrees is the state.

Re: Perpetual futures, explained

#72

Post by antoniuschan99 »

alright2565 wrote: post #24
throw101010 wrote: post #16

Earlier quoted context omitted.

> It was supposed to be limited in supply unlike fiat, and yet Tether underpins the whole thing and they print that out of thin air all the time. This is a joke right? Tether (USDT) is pegged to the dollar... and there is not really a limit to the USD printing machine, nobody ever claimed a stablecoin would have a limited supply. It's literally the main critique of the fiat system levied by crypto proponents. The onl…

The problem with Tether is that they are tight-lipped about their backing assets. No one knows if the peg is real, it's just "trust me bro"

Also interesting that tether is the private largest holder of gold at 14 billion $ xaust

Re: Perpetual futures, explained

#73

Post by Animats »

awesome_dude wrote: post #10
Analemma_ wrote: post #7

Earlier quoted context omitted.

By now crypto-in-practice has violated so many of its supposed founding principles that it's tired and cliche to point it out. It was supposed to be limited in supply unlike fiat, and yet Tether underpins the whole thing and they print that out of thin air all the time. It was supposed to be decentralized, but in practice a few big exchanges control all the transactions and a few big mining pools control all the mint…

> And it turns out nobody cares, because to a first approximation nobody is in crypto for the libertarian principles. It is all about number go up; always has been, always will be. It's not even worth pointing out anymore. I agree 100% - Meme stocks go brrrrrrrr The idea that it's a currency that lives beyond the reach of governments is laughable (as soon as something goes bang a lot of the owners call for... regulat…

> I agree 100% - Meme stocks go brrrrrrrr

Mostly, meme coins go into a screaming dive after the initial pump. Go type some meme coin names into Coinmarketcap.

Except for Bitcoin and Ethereum, almost everything in crypto has crashed hard.

Re: Perpetual futures, explained

#74

Post by trhway »

Saline9515 wrote: post #52
gametorch wrote: post #47

Earlier quoted context omitted.

That's just patently false. > Importantly, HyperCore does not rely on the crutch of off-chain order books. A core design principle is full decentralization with one consistent order of transactions achieved through HyperBFT consensus.

The basis of decentralized software is open-source. Otherwise a centralized authority can just push an update to, for instance, blacklist addresses. https://github.com/hyperliquid-dex/node "For lowest latency, run the node in Tokyo, Japan." Decentralization means to run all of the closed-source nodes in the same AWS datacenter!

The basis of decentralized software is open protocol. Then it doesn't matter that somebody runs closed source while somebody runs open source.

Re: Perpetual futures, explained

#75

Post by beeflet »

spir wrote: post #67
beeflet wrote: post #41

Earlier quoted context omitted.

I don't realize, care to enlighten us?

Here's a list of some transformative benefits of decentralized public chains https://news.ycombinator.com/item?id=46175312

the tokenized assets are only as good as their backing entity allows them to be. It's a centralized system with a facade of decentralization. Same applies to stablecoins.

You inherit all of the inefficiency of cryptocurrency and none of the decentralization. This is why the idea was abandoned back with colored coins in like 2013. With etherium, you inherit even more centralization due to the nature of the scripting system and PoS.

Re: Perpetual futures, explained

#76

Post by Nextgrid »

spir wrote: post #66
wmf wrote: post #37

Earlier quoted context omitted.

I guess you could help educate us by giving some non-gambling and non-criminal examples of innovation powered by Ethereum that justify its importance.

1. Stablecoins 2. Tokenizing all assets (equities, commodities, real estate, etc.) 3. Being able to use those stablecoins/tokenized assets in DeFi protocols that are more automated, more impartial, and less extractive than corresponding traditional finance systems. Including lending and marketplaces to buy/sell. Many industries will see parts of their back offices go onchain. Tokenized real estate + onchain swapping…

> Tokenizing all assets (equities, commodities, real estate, etc.)

How does that work?

The blockchain can only enforce its desired state on the blockchain itself. It cannot affect the real world unless you delegate said effects to a trusted party... which defeats the whole point of a decentralized, trust-less blockchain, and you could let that trusted party just run a centralized database.

How do you reconcile the ability to lose a private key with real-world assets? In the "fiat" system we rely on courts to be the ultimate arbiters in such cases and it works well enough. In this system, what should happen if someone owning a tokenized real estate asset loses the corresponding private key?

> The act of trading the tokenized asset also settles the trade

This again only works on the blockchain. When the tokens represent real-world assets the two are not in sync, and there's a risk they may not be reconcilable (you "buy" some real-estate on the blockchain, but the government having jurisdiction over the real-world location contests your ownership claim and people in uniform with guns prevent you from entering into said real estate).

Re: Perpetual futures, explained

#77

Post by awesome_dude »

Animats wrote: post #73
awesome_dude wrote: post #10

Earlier quoted context omitted.

> And it turns out nobody cares, because to a first approximation nobody is in crypto for the libertarian principles. It is all about number go up; always has been, always will be. It's not even worth pointing out anymore. I agree 100% - Meme stocks go brrrrrrrr The idea that it's a currency that lives beyond the reach of governments is laughable (as soon as something goes bang a lot of the owners call for... regulat…

> I agree 100% - Meme stocks go brrrrrrrr Mostly, meme coins go into a screaming dive after the initial pump. Go type some meme coin names into Coinmarketcap. Except for Bitcoin and Ethereum, almost everything in crypto has crashed hard.

Neither ETH nor BTC are being utilised for anything other than "Money goes in, price goes up, weee more money should go in, I'm a financial genius"

It's incredibly difficult to see either instrument as a currency, or a share, or an asset other than the fact that other people will (at this point) buy it back off you for more than you paid for it.

Re: Perpetual futures, explained

#78

Post by awesome_dude »

awesome_dude wrote: post #77
Animats wrote: post #73

Earlier quoted context omitted.

> I agree 100% - Meme stocks go brrrrrrrr Mostly, meme coins go into a screaming dive after the initial pump. Go type some meme coin names into Coinmarketcap. Except for Bitcoin and Ethereum, almost everything in crypto has crashed hard.

Neither ETH nor BTC are being utilised for anything other than "Money goes in, price goes up, weee more money should go in, I'm a financial genius" It's incredibly difficult to see either instrument as a currency, or a share, or an asset other than the fact that other people will (at this point) buy it back off you for more than you paid for it.

FTR (because El Salvador is often mentioned because it had BTC as legal tender)

https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador

> The adoption was criticized both internationally and within El Salvador, due to the volatility of Bitcoin, its environmental impact, and lack of transparency regarding the government's fiscal policy. In 2024, El Salvador agreed to partially limit its involvement with Bitcoin as part of a deal made with the International Monetary Fund (IMF). In March 2025, The Economist wrote that El Salvador's bitcoin experiment had been a failure, bringing more costs than benefits to the El Salvador economy.[4]

> In 2025, Bitcoin was rescinded as legal tender in El Salvador.[5] Besides the aforementioned problems and hacking incidents, research showed it was rarely used by the public.[5]

The Central African Republic has had similar (well worse really) experience

Re: Perpetual futures, explained

#79

Post by kikimora »

monokh wrote: post #53
kikimora wrote: post #51

Earlier quoted context omitted.

It was the case up until recently. But today Hyperliquid does it on chain and very popular.

Hyperliquid being on chain in the traditional sense is fiction. You have a closed source piece of software run by closely controlled "validators" with additionally centralised components.

Settlement is on chain which removes clearing house, exchange and brokerages from the picture.

Re: Perpetual futures, explained

#80

Post by spir »

Nextgrid wrote: post #76
spir wrote: post #66

Earlier quoted context omitted.

1. Stablecoins 2. Tokenizing all assets (equities, commodities, real estate, etc.) 3. Being able to use those stablecoins/tokenized assets in DeFi protocols that are more automated, more impartial, and less extractive than corresponding traditional finance systems. Including lending and marketplaces to buy/sell. Many industries will see parts of their back offices go onchain. Tokenized real estate + onchain swapping…

> Tokenizing all assets (equities, commodities, real estate, etc.) How does that work? The blockchain can only enforce its desired state on the blockchain itself. It cannot affect the real world unless you delegate said effects to a trusted party... which defeats the whole point of a decentralized, trust-less blockchain, and you could let that trusted party just run a centralized database. How do you reconcile the ab…

> which defeats the whole point of a decentralized, trust-less blockchain, and you could let that trusted party just run a centralized database

A centralized token (like USDC) being held in a trustless wallet is much much better and more useful than the traditional financial system.

For example, USDC in my wallet can be lent out in any onchain lending venue I pick and be sent to anybody in the world instantly.

> lose a private key with real-world assets

You're right, private key security is super important. The practical solution here is that there will be many different kinds of wallets with different trust assumptions and recovery models, and people/corporations will be directed to use the one that's net best for them. Many will be fully or semi custodial.

> When the tokens represent real-world assets the two are not in sync, and there's a risk they may not be reconcilable

Right. The idea here is to have very stringent evaluations of tokenization frameworks, to figure out which real-world asset tokens are actually quality bearer assets (from both a legal and technical standpoint) and which are not. An early example of the work here is BlueChip's stablecoin ratings https://bluechip.org/en

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