Got my attention drawn to something I believe I've talked about in at least two occasions in the past:
Perps based on Hashrates
I mean, I'm surprised this has not existed all this while, or if it does exist, it's clearly not popular.
Sincerely, this should have been a thing before NFTs or RWAs and DePINs narratives, Bitcoin has been instrumental to crypto's adoption, so why not put a bet on the one thing within that network that is largely free moving?
What Even Are Perps?
"Perps" is short for "perpetual contracts," a type of derivative in crypto and traditional finance markets. Unlike traditional futures contracts, perpetual contracts don’t have an expiration date. This means traders can hold onto them indefinitely, as long as they maintain the required margin.
ChatGPT
If you were a noob like myself, you probably would have been calling perps, futures, despite always seeing it clearly written *perpetuals within exchange apps.
In my defense, Perps are just futures without an expiry date.
Now I know that all that's been said up there may still be confusing for newbies, so here's what trading Perps looks like:
You pick an asset pair, e.g BTC/USDT. Your job is simply to predict if the price will go up or down from any entry point you choose, and if you're right, you'll earn based on your margin size(capital within the contract) multiplied by your selected leverage(a useful feature that can either make you rich or send you back to your parent's basement, usually a multiplier for base rewards like this: 2x 3x 5x 10x 20x).
Remember now that this is a perpetual contract, so you don't really earn or lose until you close your position on your own or it gets liquidated, to which point you lose your capital.
That my friend, is the essentials, for deeper knowledge, DYOR.
Bitcoin Hashrate Perps | WTF are those?
Since perpetual contracts, as a derivative, don't require buying the “underlying” asset whose market value is being mirrored, anything can be made into a perp and traded by market participants.
Variational, a newly developed decentralized derivative protocol which also recently received $10.3 million in seed funding, is developing an infrastructure for “perp-ifying” everything - as it dubs it.
While originally conceived for crypto underlyings, perps hold the potential to greatly improve trading across various asset classes. By "perp-ifying" other markets that have been historically difficult to trade, such as predictions, hashrates, NFTs, volatility, interest rates, and more, traders could enjoy the benefits of perps–simplicity, leverage, and shorting–across a set of markets that are otherwise inaccessible.
The future of perp-ification unlocks a plethora of new use-cases and opportunities for traders. Hashrate perp markets, for example, could be used by institutional and retail crypto miners to hedge their operations. Prediction perp markets could attract much deeper liquidity, making them significantly more efficient and reliable than existing betting platforms.
I have personally found interest in Hashrate trading as hashrate is an energy-inclined metric within the Bitcoin network and most likely swings with less human manipulation.
This autonomy creates room for a fair playing field for speculating and betting on the Bitcoin network’s operations.
If you look at prediction markets for example, several events being betted on can be manipulated, just as the Bitcoin or general crypto price swings can be manipulated by market makers and/or institutional traders.
By taking things to the network layer, we have less room for manipulation as that generally involves real world costs. Of course miners could attempt to influence outcomes but significant shifts can be easily tracked and not exactly sure that such actions would be legal.
That said, also considering that this is all built on a decentralized layer, the blockchain, there's even more community advantage to adopt or get involved.
Of course, bitcoin will likely not be the only blockchain of focus when Hashrate Perps become a mainstream thing, but it will surely attract one of the biggest pools of bets and will serve as a unique way for miners to offset costs.