Traders are never really afraid of drops—the thing they fear is what happens when the market truly gets smashed, and then you realize you can’t even run anymore.
So lately, when I look at @Dusk, I’ve become increasingly concerned about a somewhat contradictory point: as DUSK’s derivatives leverage is being increased, can its spot liquidity base really keep up?
Right now, DUSK is around $0.065. Its 24-hour trading volume is about $3.8 million, and its market cap is roughly $32.5 million. Looking at volume alone, it might not seem like nobody’s playing it—but volume and order book depth are two different things. For a coin of this size, what truly determines whether you can trade at high frequency is this: after you slam a $10k, $50k, or even $100k market order into it, how much will slippage actually widen?
What’s even more interesting is that Bitget already delisted the DUSK/USDT spot pair in July; on the other side, Bybit is preparing to raise the maximum leverage for the DUSKUSDT perpetuals from 12x to 25x.
That’s a bit at odds.
Making the leverage at the trading entry higher means short-term capital can pile in more easily, and liquidation chains can be amplified more easily too. But if spot execution and cross-platform depth haven’t thickened in sync, then in extreme market conditions, the gap between contract price, index price, and the price you can truly trade at becomes even more worrying.
I’m not even that concerned whether funding rates are usually positive or negative. What I really want to know is: when the market suddenly rallies 10% or dumps 10%, can the order book still hold up? Will canceling orders become noticeably slower? Can large orders still exit at the expected price?
For high-frequency traders, 25x isn’t a positive. Whether the depth is sufficient is what matters.
This may also be the question that @Dusk needs to answer next: the story can get bigger and bigger, but the trading infrastructure also has to withstand ever-increasing leverage.
#dusk $DUSK @Dusk
So lately, when I look at @Dusk, I’ve become increasingly concerned about a somewhat contradictory point: as DUSK’s derivatives leverage is being increased, can its spot liquidity base really keep up?
Right now, DUSK is around $0.065. Its 24-hour trading volume is about $3.8 million, and its market cap is roughly $32.5 million. Looking at volume alone, it might not seem like nobody’s playing it—but volume and order book depth are two different things. For a coin of this size, what truly determines whether you can trade at high frequency is this: after you slam a $10k, $50k, or even $100k market order into it, how much will slippage actually widen?
What’s even more interesting is that Bitget already delisted the DUSK/USDT spot pair in July; on the other side, Bybit is preparing to raise the maximum leverage for the DUSKUSDT perpetuals from 12x to 25x.
That’s a bit at odds.
Making the leverage at the trading entry higher means short-term capital can pile in more easily, and liquidation chains can be amplified more easily too. But if spot execution and cross-platform depth haven’t thickened in sync, then in extreme market conditions, the gap between contract price, index price, and the price you can truly trade at becomes even more worrying.
I’m not even that concerned whether funding rates are usually positive or negative. What I really want to know is: when the market suddenly rallies 10% or dumps 10%, can the order book still hold up? Will canceling orders become noticeably slower? Can large orders still exit at the expected price?
For high-frequency traders, 25x isn’t a positive. Whether the depth is sufficient is what matters.
This may also be the question that @Dusk needs to answer next: the story can get bigger and bigger, but the trading infrastructure also has to withstand ever-increasing leverage.
#dusk $DUSK @Dusk