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BitMEX Will Soon Let You Trade Leverage on Another Ethereum Fork

A new Ethereum fork resisting the upcoming merge doesn’t exist yet, but BitMEX wants to make sure the token has a market for speculators.

2 min read
Whenever a crypto network forks, there's often a new token created. Image: Shutterstock

Traders will soon be able to speculate on the future price of a forked Ethereum coin, even though it may never exist.

In advance of Ethereum’s merge event—a move which will see the whole network shift to proof of stake—crypto exchange BitMEX is launching a Tether-margined (USDT ERC-20) futures contract for ETHPOW, the cryptocurrency that could result from an attempt to resist the merge.

Chandler Guo, an influential Ethereum miner, launched a campaign late last month in opposition to the merge event, with a plan to force a hard fork in the network.

If successful, the resulting spin-off network would be called ETHW and its token would be ETHPOW.

Although it is not yet certain that merge resistors will succeed, BitMEX wants to offer customers a way to trade on the price of ETHPoW and is launching the contract ETHPOWZ22 tomorrow.

BitMEX warned that the product was “highly speculative,” due to the fact that ETHPOW does not yet exist and may never exist. There is also a higher possibility of auto-deleveraging, which exchanges use when a position is closed in negative equity, and the insurance fund is unable to cover the losses.

The contract supports up to 2x leverage, and will at least initially operate on the “Last Price” mark method. This may eventually be changed to the more generally used “Fair Price” method when there is enough information to create an index.

Earlier this month, BitMEX researchers wrote a blog post that concluded that ETHPOW “may have many technical challenges and its long term viability is in question” but that “its existence may provide an exciting opportunity for traders and speculators in the short to medium term.”

Traders will have to wait another month to see how the split turns out, with Ethereum’s merge currently expected on September 19.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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