Injective Protocol Vs Centralized Crypto Derivatives Exchanges (BitMEX, FTX, and Binance Futures)

in #exchangelast year (edited)

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The exchanges, BitMEX, Binance and FTX have some features in common - they are centralized exchanges (CEX) and they offer varieties of cryptocurrency derivatives to their users. Margin and future trading were once limited and available to traditional traders but have now become available to crypto traders as various financial institutions and professionals join the crypto industry. A crypto derivative is a financial contract between multiple parties whose value is based on the future price of the underlying crypto, for example Bitcoin futures.

The availability of these financial instruments in the crypto industry is a major milestone, and it further proves that the industry is maturing. However, the potential of these financial tools suffer from the limitations common to centralized trading platforms. It therefore takes a big chunk off the excitement and benefits of having access to margin and derivatives in the CEX context.


This question will be adequately addressed in the following paragraphs.

The Weaknesses of Centralized Crypto Derivatives Exchanges
While CEXs such as BitMEX, Binance, FTX and other competitors are currently dominating the crypto futures and derivatives industry, they are known to have issues ranging from security, data privacy protection and regulatory issues. To make the matter worse, some of these centralized trading platforms have been alleged to manipulate trades causing grave financial loss to their users.

BitMEX for example has suffered repeatedly from crashes due to the inability of the order matching engine to withstand the overwhelming volume of transactions processed on it. Ultimately, the users bear the brunt, and it is often adverse as many traders get liquidated due to the inability to exit their positions. Some believe it is a calculated attempt to manipulate the market. The centralized nature of these exchanges could be exploited for trade manipulations.

In addition, centralized exchanges are honeypots for hackers because they are vulnerable to malicious attacks due to their nature as single points of failure. These could result in devastating security breach in one or both of the user crypto assets stored on the exchange wallet and customers personal information. There have been various reported incidents of leakage of customer's information as well as theft of user crypto assets. Centralized systems are wont to lose control of their servers and systems because of their nature.

These issues call for a sustainable innovative alternative to access decentralized finance (DeFi) in a really decentralized way as conceived by the creator of Bitcoin blockchain - the first permissionless, trustless, peer-to-peer network for the exchange of value.

And for the first time, crypto investors and traders will be able to access crypto derivatives in a truly decentralized environment devoid of the weaknesses of centralized exchanges and existing decentralized exchanges.

Injective Protocol is here.

Injective Protocol - A better Alternative to BitMEX, Binance and FTX for Futures and Derivatives Trading


Injective Protocol is a completely permissionless and decentralized front-running resistant layer-2 protocol for fast throughput and secure exchange of crypto assets. The exchange is built to solve all the problems associated with CEXs and DEXs, and for the first time, the world is having an exchange that is entirely open-source from the front end to the back end resources. What better way to capture complete decentralization!

Injective Protocol is building a completely permissionless and decentralized protocol for crypto derivatives - Injective Futures. This platform will allow anyone to trade margin and derivative products such as perpetual contracts on a p2p basis, no need to send crypto assets as collaterals to a central authority as is done on BitMEX, FTX, Binance, Houbi, and others. Injective Protocol is entirely non-custodial and trustless. Transactions are executed directly from the wallet of the trader when connected to the platform. The protocol, powered by Injective chain, serves as a decentralized Trade Execution Coordinator (TEC). This eliminates the risk of asset theft due to security breach as the wallet owner is totally in control of their digital assets.

This will hugely benefit traders that are unable to leverage on cryptocurrencies and their derivatives due to unfavorable government regulations in their home country, and by extension everyone. For example, US citizens are unable to trade crypto derivative products on BitMEX and FTX due to regulatory issues. In the same vein, several other CEXs have shut their portals against US traders and investors for the same reason. It is thus apparent that a platform like Injective Protocol is needed to save the day.

Injective Protocol is a potential formidable competition to the dominance of BitMEX, FTX, Binance Futures, and Huobi in crypto futures and derivatives markets. Since the platform is purposely built as a layer-2 protocol, it means that it will not suffer from low latency like existing DEX or system overload crashes like BitMEX and others. This will enable the exchange to be able to handle thousands of transactions per second (tps) on-chain unlike BitMEX that can only process just about 500 tps.

Injective Futures Protocol is a critical component of the Injective Protocol ecosystem. The protocol consists of smart contracts that power trustless futures and derivatives trading. Injective Futures provides the direct decentralized channel to non-custodial perpetual swaps. It empowers traders and investors to trade crypto derivatives such as decentralized perpetual swaps, contracts for difference (CFDs), and other types of synthetic assets. The protocol does not depend on centralized operator or any centralized price feed to offer priceless decentralized financial contracts

In fact, users can create new derivative products that track the prices of underlying assets, even if the token is yet to be created.
No registration, KYC or security palaver, traders only need to connect their wallet to the exchange to begin to leverage - long or short, futures and other derivative products.

Injective Protocol Bounty Program
Injective Protocol team is currently running a marketing campaign in the form of Bitcointalk Bounty program with a total prize pool of 30,000 USDT paid in Ethereum. There are various campaigns in the bounty for participants to partake. Unless announced otherwise, the program will run till July 31, 2020(CST).


Click this link to join the program.

While CEXs are currently dominating the crypto space in general, the true worth of decentralized finance cannot be fully unlocked by these exchanges as many users are currently locked out of the industry. Injective Protocol is built to offer a formidable alternative to leading centralized crypto derivatives exchanges like BitMEX. This will open up the emerging world of digital financial assets to everyone, and unleash its full potential, with no restrictions or intermediaries. In contrast to BitMEX and the likes, Injective Protocol users are not exposed to the underlying assets while trading futures.

With the upcoming launch of Injective Protocol, it is only a matter of time for the exchange to overtake BitMEX, Ftc, Binance and other similar CEX futures exchanges. Decentralized finance.

Useful Links
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Author: Mexite
Author’s Bitcointalk Profile URL

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