Interview with Binance Futures Head: Why Does Binance Offer 125x Leverage?

(Aaron Gong)

In September 2019, Binance launched its futures trading platform, Binance Futures, marking its official entry into the derivatives market. Two months later, Aaron Gong, Director of Binance Futures, sat down for an exclusive interview to discuss the platform’s growth and unique features.

Previously, Aaron spent seven years at CME (Chicago Mercantile Exchange), where he played a key role in developing products like CME’s Bitcoin futures.

Key Insights from the Interview

1. $10 Million Insurance Fund to Protect Users

Q: How has Binance Futures performed since its launch?
Aaron Gong:

• Achieved a daily trading volume of 19,253 BTC on launch day.
• By October 3, daily volume surpassed Binance’s BTC/USDT spot market.
• Currently ranks #2 in trading volume (per Skew data).
• USDT-margined contracts ensure liquidity, with plans to support cross-collateral (using other cryptocurrencies as margin).
• More trading pairs in development, targeting at least one addition by year-end.

Q: Why offer 125x leverage—higher than competitors?
Aaron:

• Responding to user demand (most clients use ≤100x).
• Risk controls: Only positions <$50K nominal value qualify for 125x.
• No plans for "1000x leverage" due to limited demand.

2. Binance Futures’ Competitive Edge

1. Speed & Reliability:

   • NASDAQ-grade matching engine (100K orders/second).
   • Handles 1M+ concurrent users without lag.

2. Risk Management:

   • Uses mark price for liquidation (avoiding "spikes").
   • $10M insurance fund (backed by Binance) absorbs losses.

3. Low Fees:

   • Industry-lowest fees, with 50% discounts for early users.

4. Smart Liquidation:

   • Positions auto-save if margins stabilize above maintenance levels.

3. Market Expansion & Ecosystem Growth

Q: What’s next for Binance Futures?
Aaron:

• Focus on three core user groups:

  1. Hedgers/Arbitrageurs
  2. Market Makers
  3. Speculative Traders
• New market maker program launched to enhance liquidity.

Team Size: ~25 (expanding).

4. From Traditional Finance to Crypto

Q: Why shift from CME to crypto?
Aaron:

• Initially skeptical, but inspired by Bitcoin’s disruptive potential.
• Joined Binance after seeing institutional interest grow post-CME Bitcoin futures launch.

Trend: More traditional finance professionals are entering crypto (e.g., ex-CME clients now trading on Binance).

FAQs

Q: How does Binance prevent "socialized losses"?
A: The $10M insurance fund covers liquidations. If depleted, Binance replenishes it—no user分摊.

Q: Why no "1000x leverage"?
A: Minimal demand, and 125x already meets high-risk traders’ needs.

Q: Will Binance add options?
A: Possible, but current priority is expanding futures pairs.

👉 Discover Binance Futures’ Low Fees Today
👉 Learn About Cross-Collateral Margining

Note: 125x leverage requires careful risk assessment. Trade responsibly.