In just 2 days, $CORE rose from 0.4 to 0.47, peaking at 0.52.
➤ New Core proposal passed: validator margin raised to 50x
I checked Core's official Twitter and found out that Core passed a new proposal, increasing the margin of Core validators from 10,000 $CORE to 500,000 $CORE, which is 50 times the original.
In addition to increasing the demand for $CORE among validator nodes, higher margins also mean that validators will bear greater responsibility for ecosystem security, thus ensuring greater security for the Core ecosystem.
This can explain why, even though $CORE is not the token with the highest price increase, it still ranks first on the hot list of Coinmarketcap.
➤ Satoshi Perps vs. Hyperliquid
It was actually because a few days ago I wanted to play with Satoshi Perps, a BTC-denominated perpetual futures, that I bought some CORE to cover GAS, and as a result, CORE surged.
However, the recent turmoil with Hyperliquid has triggered thoughts on similar products. Satoshi Perps and Hyperliquid are both perpetual futures DEXs based on LP liquidity pools, and they are both set to launch around December 2024.
❚ Relative advantages of Hyperliquid
First, in terms of ecosystem scale, Hyperliquid is at an advantage. According to Defillama, Hyperliquid's TVL was nearly $700 million at its peak, while Satoshi Perps' peak TVL was $11.05 million.
Second, Hyperliquid's auction listing is a major innovation in the crypto market. Hyperliquid's listing mechanism is more decentralized.
Third, Hyperliquid offers a relatively better product experience.
❚ Relative advantages of Satoshi Perps
First, Satoshi Perps is a non-custodial DEX, which has a higher degree of decentralization.
Satoshi Perps is a non-custodial DEX based on the Core chain ecosystem, where you can use it by connecting your wallet, and the funds are visible in your wallet. There is no need to deposit into Satoshi Perps.
In contrast, Hyperliquid is a custodial or semi-custodial DEX. Brother Bee used DeBridge to transfer $HYPE to Hyperliquid across chains, but the balance seen in Hyperliquid's DEX was zero. A deposit into Hyperliquid is necessary to trade.
Second, the underlying public chain of Satoshi Perps is relatively more decentralized.
The underlying public chain of Satoshi Perps, Core, claims to be a PoS layer compatible with EVM for Bitcoin, which sounds like Layer2, but it is actually Layer1. At the beginning of March, there were 30 validators, and by the end of March, there were already 47 validators.
Looking at the names of Core chain validators, there seem to be various institutions and individual validators, including those we are familiar with such as OKEx, Bitget, and Huobi.
The foundation of Hyperliquid is Hyperliquid EVM, which claims to be Layer1, but is more like Layer3 on the Arbitrum ecosystem.
No validator information was found on the block explorer for Hyperliquid or Hyperliquid EVM.
Third, Satoshi Perps mainly involves perpetual futures of mainstream coins with relatively low volatility.
Currently includes $CORE, $BTC, $ETH, $SOL, $XRP, $TRUMP, $DOGE, $SHIB, $BONK, $FLOKI, $$SUI, $APT, $TRX, $BERA, $AVAX, $LINK, $ENA, $SOLV, $KAITO.
Mainstream coins have relatively low volatility, making it difficult to have price manipulation or large price fluctuations like the $JELLY token; thus, it is also unlikely to have situations like the recent losses incurred by LPs due to liquidations on Hyperliquid.
Fourth, Satoshi Perps has a more stable liquidation mechanism.
There is a passage in the technical documentation of Satoshi Perps that states:
"Liquidations: To maintain system solvency, positions can be liquidated by keepers if losses reduce the collateral to the point where position size / remaining collateral exceeds the maximum allowed leverage. This process is automated to ensure the stability of the protocol."
Translated into Chinese is:
"Liquidations: To maintain system solvency, when losses reduce the collateral to the extent that the ratio of 'position size / remaining collateral' exceeds the maximum allowed leverage, positions can be liquidated by keepers. This process is automated to ensure the stability of the protocol."
While most people focus on whether Hyperliquid is centralized or not, from a product perspective, when traders are liquidated, it should be mandatory liquidation, with their margin used to offset their borrowed funds (leverage position size). However, Hyperliquid has certain imperfections that lead to 'attacker's contract orders' being insufficient to cover their borrowed funds during liquidation, resulting in losses for LPs.
In contrast, in the design of Satoshi Perps, when the 'position size / remaining collateral' ratio of contract traders exceeds the maximum allowed leverage, liquidation is triggered. This means that the holdings of contract traders do not need to fall to the level of their margin; even when slightly above the margin, liquidation will be triggered, thereby reducing LP's risk and ensuring the stability of the Satoshi Perps protocol.
Fifth, Satoshi Perps does not have a margin withdrawal mechanism.
One reason for the recent incident with Hyperliquid is that the 'attacker's contract orders' withdrew some margin, thereby indirectly increasing the leverage ratio and prompting liquidation. During liquidation, the value of the 'attacker's contract orders' was lower than their margin, resulting in losses borne by LPs.
In the technical documentation of Satoshi Perps, no similar mechanism was found. Satoshi Perps does not have a margin withdrawal mechanism, greatly reducing the likelihood of similar incidents occurring like those with Hyperliquid.
➤ 250x leverage may not be exaggerated
Some friends believe that the 250x leverage of Satoshi Perps is too exaggerated.
First, 250x is the maximum leverage ratio; it is more like a gimmick to spark discussion and attract risk-tolerant players. Users can actually use low leverage, with a minimum of 1.1x leverage.
Second, Satoshi Perps is BTC-denominated perpetual futures, and the volatility of 'token/BTC' is usually less than 'token/stablecoin', so the apparent 250x leverage is actually a bit lower.
Finally, I am uncertain whether the team intentionally designed it this way, but the 250x leverage makes me feel that this project is not from a Chinese team and not a domestic project.
➤ In conclusion
The Core chain ecosystem is steadily developing, including its security and degree of decentralization.
Based on the Core chain, Satoshi Perps, as a BTC-denominated perpetual futures DEX, is the first platform in the network that allows users to long or short altcoins using BTC.
The Core chain and Satoshi Perps have a higher degree of decentralization, and the design of Satoshi Perps' perpetual futures trading assets and liquidation mechanisms makes it less likely for events similar to Hyperliquid to occur.