DeFiance CEO: Crypto perpetual contracts still have structural flaws and require more secure products.

According to Odaily Planet Daily, the CEO of DeFiance Capital stated in an article published on the X platform that the product design and market structure of crypto derivatives (especially perpetual contracts) remain the biggest structural problems facing the industry. Without improvement, it will be difficult to support the industry's sustainable growth. He pointed out that the market cannot "pretend everything is normal" after cyclical events that result in massive wealth evaporation, and the industry urgently needs a more robust mechanism.

The report recalls that the 50% to 70% drop in Bitcoin within hours in March 2020 was similar to the altcoin crash in October, both exacerbated by systemic failures in the key price discovery market. At that time, most BTC perpetual contracts were "Quanto-based" (priced in BTC and backed by BTC), making them highly reflective of the downside risk and extremely difficult to hedge.

As the market became aware of its design flaws, coupled with the growth in stablecoin usage, USDT-margined perpetual contracts quickly replaced BTC-margined contracts, significantly improving the robustness of the market structure and reducing volatility.

He expressed his anticipation for the emergence of a new generation of perpetual contract products to further improve the security and market quality of crypto derivatives.