His tweet read,
“This happened on ETHUSD Perp futures. It was caused by one trader, both ways. We believe this may be intentional sabotage from a competitor. The trader lost lots of money himself. But also caused other stop orders to trigger. We will make a few changes to reduce in the future.”
Taking into consideration the state of the order book, many in the community were doubtful whether one single trader could, in fact, scam the entire liquidity despite the fact that Gong asserted that the Binance Futures team would make several changes to ensure this situation does not arise again in the future. Elaborating on the changes to be implemented on the platform, the VP stated,
“We will change the stop order to default to Mark (index) price, not Last price. Many novice users don’t know the difference, and used Last Price. Using Mark price would avoid this problem. We will turn on Price Protection for all stop orders, including existing one. This way, if the Last Price and Mark price differs significantly, the stop orders will not trigger.”
He further went on to add that the team would invite and incentivize more market makers to provide more liquidity and order book depth, in the hopes to reduce the likelihood of the attack happening in the future.
According to the chart compiled by the crypto-analytic platform Skew, Binance rose to the second position in terms of Exchanges 24-hour ETH Futures Volumes due to the episode. At press time, Binance recorded $953 million in ETH futures volume trailing behind Huobi at $1736.6 million.
Despite Gong’s clarification on the issue, many users claimed that the potential cause of the abrupt spike was something else. Here are some of the comments on his original thread:
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