BitMEX ends an era: how Hayes saved perpetual contracts, and the founder was predicted to face prison
The closure of BitMEX stirred a wave of nostalgia among crypto industry veterans. Over 11 years of operation, the platform did not lose a single satoshi due to hacks and gave the market a product that all competitors copied. However, behind the dry facts lie amazing stories — from a perpetual contract that was almost deleted to a founder who was expelled from school three times.
How the Perp Was Almost Deleted in the First Month
In May 2016, three developers created a perpetual swap — a futures contract with no expiration date. A position can be held indefinitely, while the contract price is maintained by a funding rate — periodic payments between buyers and sellers. In the first month, the product nearly died. The market was working so poorly that one of the founders wanted to simply delete the development. Arthur Hayes saved the situation. He talked his colleague out of deleting it and fixed the funding rate mechanism over the weekend, which keeps the perpetual contract price aligned with the spot price. The market still feels the outcome of that argument: every perpetual contract on every crypto exchange today exists thanks to Hayes' decision. The instrument itself became the most traded product in the crypto industry, even though it was invented on BitMEX.
The Prodigy Destined for Millions and Prison
A separate story involves one of the platform's co-founders, Ben Delo. As a child, he was expelled from three primary schools. At Oxford, his classmates predicted two potential futures for him: they recognized him as the most likely candidate to become a millionaire and the second most likely to end up behind bars. In the end, both predictions came true. Delo indeed amassed a fortune but also faced legal troubles.
One commenter compared the company's journey to the early history of Stripe: first chaos, then infrastructure that everyone else copies. Another discussion participant summed up the thought at the industry level: in their observation, wild stories and durable technologies in cryptocurrencies are often created by the same people.
Tuition Fees Paid Live
The contrast between joy and pain was also felt in the company's daily life. The team rented the 45th floor of one of Hong Kong's most expensive towers, next to Goldman Sachs. At the same time, their users were getting "burned" on 100x leverage. Many did so in pajamas at four in the morning, which became a symbol of the era. It is this experience that veterans recall most often. One trader called BitMEX a place that taught an entire generation risk management, charging "tuition fees live."
Many shared their stories of losses. One user recalled staring at a zero balance at three in the morning in 2018, while another claimed that from December 2017 to March 2018, they lost almost their entire portfolio of 30 BTC. According to the latter, during extreme volatility, neither the stop-loss nor the close order worked on the exchange, leading to liquidation. This claim cannot be verified, but the emotion — "the most expensive lesson in life that made me a better trader" — was shared by many in the comments.
Expert opinion: BitMEX will forever remain in history as a pioneer that created a derivatives market that changed the rules of the game. However, the lessons of this platform — both technical and human — remind us that innovations in cryptocurrencies often go hand in hand with chaos and risk that not everyone can handle.