KuCoin’s derivative arm KuMex launches Bitcoin quarterly delivery contracts

Kucoin exchange’s derivative Futures contracts arm, KuMex, has announced the launch of Bitcoin quarterly delivery contracts on 31 October. Michael Gan, CEO of KuCoin, had previously announced monthly Bitcoin Futures contracts during the Blockchain Life Forum held earlier this month.

The newly-announced derivative contracts will be quite different from the perpetual contracts being offered at present. The newly-offered delivery contracts would have an expiry date and the settlement value would be based on the underlying asset and would follow a set of pre-specified rules.

These delivery contracts will be settled on every Friday of the settlement month, wherein the settlement time is at “30-minute Time Weighted Average Price (TWAP) of the spot index at 12:00 UTC on the delivery date.” These quarterly contracts will be listed for 2 consecutive quarters; For example, if today is 1 May, then the contract months will be June and September.

KuCoin launched its derivative arm back in July and has gained a significant userbase since then, mostly because of its negative maker fee of -0.025%, in hopes that it would encourage traders to provide enough liquidity for the platform. Its perpetual contracts are listed against the U.S Dollar with a 20x leverage to traders, making it quite an attractive platform for traders.

The Bitcoin Spot Index on KuMex is calculated by the volume-weighted average U.S dollar price of Bitcoin across 6 major crypto-exchanges, which include the likes of Coinbase Pro, Bitstamp, Kraken, Gemini, Liquid, and Bittrex. The intention behind using such a diverse methodology to calculate the spot index is to ensure that the platform possesses the most accurate and fair prices. It also avoids liquidation of the trader’s contracts due to low liquidity.