U.S. markets closed
  • S&P Futures

    4,162.00
    -14.25 (-0.34%)
     
  • Dow Futures

    33,968.00
    -113.00 (-0.33%)
     
  • Nasdaq Futures

    13,984.00
    -45.50 (-0.32%)
     
  • Russell 2000 Futures

    2,247.10
    -11.90 (-0.53%)
     
  • Crude Oil

    62.86
    -0.27 (-0.43%)
     
  • Gold

    1,777.50
    -2.70 (-0.15%)
     
  • Silver

    25.99
    -0.12 (-0.46%)
     
  • EUR/USD

    1.1972
    -0.0009 (-0.07%)
     
  • 10-Yr Bond

    1.5730
    +0.0430 (+2.81%)
     
  • Vix

    16.25
    -0.32 (-1.93%)
     
  • GBP/USD

    1.3822
    -0.0018 (-0.13%)
     
  • USD/JPY

    108.7100
    -0.0730 (-0.07%)
     
  • BTC-USD

    55,929.62
    -5,188.27 (-8.49%)
     
  • CMC Crypto 200

    1,260.64
    -131.07 (-9.42%)
     
  • FTSE 100

    7,019.53
    +36.03 (+0.52%)
     
  • Nikkei 225

    29,683.37
    0.00 (0.00%)
     

Binance Pledges New Controls After 99% ‘Flash Crash’ in Polkadot Futures

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Omkar Godbole
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Binance, one of the world’s biggest cryptocurrency exchanges, said it would consider new marketplace controls after a single large order apparently triggered a flash crash early Friday in polkadot (DOT) trading contracts.

  • Prices for the quarterly perpetual-futures contracts on polkadot were trading around $33.25 right around 1:45 coordinated universal time (8:45 p.m. EST), when suddenly they tumbled 99.2%.

  • The contracts fell as low as $0.25 in less than a minute, before quickly bouncing back to around $33.

  • In just that single minute, some $18 million of the contracts changed hands on the exchange.

  • “A user, who held a large position, put a single stop market order in the market, which triggered this needle,” a Binance representative told CoinDesk in an email. “It didn’t affect any other users’ positions as we are using mark price for liquidations.”

  • “We will add more controls of stop market order size limits to prevent a similar recurrence,” the representative added.

  • While the futures market flash crashed, the cryptocurrency held steady near 33 USDT in the spot market, Binance’s data shows.

  • These “coin-margined” perpetual futures are products margined and priced using a cryptocurrency, such as bitcoin, instead of the dollar (fiat).

  • A stop market order is an order to buy or sell a stock at the market price once the user-decided stop price is hit.

  • In this case, the user was holding a large position that exceeded the total available bids in the market, according to the Binance representative.

  • Polkadot is a blockchain network that supports various interconnected sub-blockchains called parachains, designed to provide a higher transaction throughput than the leading Ethereum network.

  • The Polkadot network’s DOT token is one of this year’s hottest cryptocurrencies, quadrupling in price already in 2021, for a market value of more than $30 billion. The Wall Street firms Goldman Sachs, JPMorgan and UBS are even reportedly trading exchange-traded products linked to DOT on a Swiss exchange.

Related Stories