BitMEX Legend: How Hayes Saved Perpetual Contracts and Why the Founder Was Predicted to Go to Prison
The closure of BitMEX has sparked 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 worthy of a separate investigation.
How the Perpetual Swap Almost Got Deleted in the First Month
In May 2016, three developers created the perpetual swap — a futures contract with no expiration date. Positions can be held indefinitely, and the contract price is kept in line with the spot price by the funding rate — periodic payments between buyers and sellers. Within the first month, the product nearly died. The market was functioning so poorly that one of the founders wanted to simply delete the development. The situation was saved by Arthur Hayes.
It was he who talked his colleague out of deleting it and over the weekend fixed the funding rate — the mechanism that keeps the perpetual contract price aligned with the spot price. The market still feels the outcome of that argument today: every perpetual contract on every crypto exchange exists thanks to Hayes's decision. The instrument itself became the most traded product in the crypto industry, even though it was invented on BitMEX.
The Prodigy Predicted to Become a Millionaire and Go to Prison
A separate story involves one of the platform's co-founders, Ben Delo. As a child, he was expelled from three elementary schools. At Oxford, his classmates predicted two potential futures for him: they deemed him the most likely candidate to become a millionaire and the second most likely to end up behind bars.
Both predictions came true. Delo indeed amassed a fortune but also faced legal troubles. One commentator 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 for the entire industry: 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, right next to Goldman Sachs. At the same time, their own users were "burning out" on 100x leverage. Many did so in their pajamas at four in the morning — this 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 about risk management, charging "tuition fees live." Many shared their stories of losses: one user recalled watching a zero balance at three in the morning in 2018, while another said that from December 2017 to March 2018, he lost almost his entire portfolio of 30 BTC.
Expert opinion: BitMEX will forever remain a symbol of the "Wild West" of crypto trading. It was on platforms like this that the risk management culture was forged, which is now the standard for the entire industry. The lessons taught by this exchange cost millions, but they also shaped a generation of disciplined traders.