- None of this is investment advice.
- Much of the below analysis ignores any difference between futures and spot prices, and ignores the effects of fees. General terms are often used for concepts like hashrate and difficulty for ease of understanding without always specifying how they are measured. It also generally assumes that all transactions happened at theoretical prices.
- Users should trade Hashrate Futures at their own risk.
- Like other futures on FTX, there is liquidation risk for Hashrate Futures.
- Hashrate Futures, like the rest of FTX, are not being offered to US users.
FTX is launching futures on BTC mining difficulty!
What Are Hashrate Futures?
FTX's Hashrate Futures are futures that expire to the average BTC mining difficulty over a period of time. This means that they roughly represent the total hashpower being used to mine BTC.
What Exactly Do They Expire To?
Each Hashrate Future has an expiration start and end time. They start at 3AM on the last Friday of the previous quarter and end at 3AM on the last Friday of the current quarter.
The expiration value of the Hashrate Future is determined as follows:
1) take each block that is mined during the quarter
2) Take the difficulty for that block
3) Average those difficulties together
4) Divide by 1 trillion
This means that the Q32020 Hashrate Future expires, roughly, to the average difficulty of mining a bitcoin for July-September 2020.
By difficulty, we mean this. As of May 2020, the difficulty is roughly 16 trillion, meaning the index is roughly 16.
What Does This Say About Hashrate?
It's impossible to exactly measure hashrate--the best you can do is approximate it from block times and difficulty. However, given that difficulty adjustments attempt to maintain 10m block times, over long periods of time the average hashrate will be proportional to the average difficulty. So that means that, roughly speaking, difficulty futures should behave similarly to hashrate futures.
How Does Margin Work?
Margin works exactly the same for Hashrate Futures as for standard futures on FTX. The specific parameters are:
Tick Size: $0.001
Quantity Step: 0.01
IMF Factor: 0.003
Position Limit Weight: 100
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