Deribit Review

Deribit is a cryptocurrency derivatives exchange specializing in Bitcoin and Ethereum futures and options trading. The platform offers up to 100x leverage for Bitcoin and 50x for Ethereum futures transactions. Initially established in the Netherlands in 2016 by Jinh Jansen and his team as Deribit B.V, it later adopted the name ‘Deribit.’ Since February 2020, the company has been operating from Panama.

Deribit Summary

Table Header	Table Header
Official Website	https://www.deribit.com/
Headquarters	Panama
Found in	2016
Native Token	None
Listed Cryptocurrency	Bitcoin and Ethereum
Trading Pairs	N/A
Supported Fiat Currencies	USD
Supported Countries	Worldwide, except in the USA, Canada, Japan, and a few more countries
Minimum Deposit	0.001 BTC
Deposit Fees	Free
Trading Fees	Maker Fee -> -0.01% Taker Fee -> 0.05%
Withdrawal Fees	Depends on the Bitcoin Network
Application	Yes
Customer Support	Mail & FAQ Support

Quick Overview of Deribit

Established in 2016, these global cryptocurrency exchanges specialize in futures and trading. They offer 50x leveraged futures for Ethereum and leveraged trading for both Bitcoin and Ethereum. Additionally, they provide 100x leveraged futures for Bitcoin and boast high-speed trade matching performance.

What Is Deribit?

Deribit functions as a platform for trading cryptocurrency derivatives, including futures and options. The exchange allows traders to engage in BTC futures trading with 100x leverage, as well as ETH futures trading with 50x leverage. Options trading for BTC is also available with a maximum leverage of 10x. Despite offering high leverages, Deribit prioritizes the security of customers’ digital funds by utilizing cold storage wallets.

How Does Deribit Work?

Deribit is a cryptocurrency derivatives exchange that offers two trading pages, one for Bitcoin futures trading and one for Bitcoin options trading. Customers can select their order type, including stop market, limit, and market orders.

Once the order is placed, it passes through Deribit’s fast trade matching engine, risk management system, and algorithm, which analyzes time-price prioritization. Deribit does not accept self-orders, which are immediately identified and rejected by the system.

The risk management engine is crucial to the exchange’s operation, processing thousands of orders every second. Orders approved by the system are sent to the order matching system, while others are returned to the user.

The Deribit BTC exchange determines the prices for trades, using real-time data from various sources to calculate the BTC Index prices. Orders are executed at the average price of all 450 updates of the index in the last 30 minutes before the order expires.

Customers must maintain a maintenance margin, and if the funds fall below the margin, a margin call is initiated, and the user’s assets are liquidated until the margin is reached again. Deribit uses an incremental auto-liquidation system, and during the process, the user loses control of their account until the maintenance margin is less than 100% of their equity.

In addition to these measures, Deribit has an insurance fund to cover the losses suffered by bankrupt crypto derivatives trading, further ensuring the security of customers’ digital funds.

Is Deribit Regulated?

Deribit, a global cryptocurrency derivatives exchange, is registered under the Republic of Panama and is not regulated by any international financial regulatory authorities. It is suspected that Deribit moved its operations from the Netherlands to Panama to avoid stricter AML regulations. However, as of November 9, 2020, Deribit requires customers to submit proper KYC documentation to create a trading account and access the exchange.

While Deribit’s services are legal in many countries, it is restricted in some. Specifically, it is not legal in the USA, Canada, or Japan, and residents and citizens of these countries are not allowed to use the exchange.

Features of Deribit

Deribit offers perpetual, futures, and options trading for both Bitcoin and Ethereum. Customers can engage in Bitcoin options trading with up to 10x leverage, as well as Bitcoin futures trading with up to 100x leverage and Ethereum futures trading with up to 50x leverage.

Deribit boasts one of the fastest matching and risk management engines in the world, with the ability to process thousands of orders per second and a trade matching engine with a latency of less than 1MS. This ensures no market slippage in prices and orders can be settled at their original estimated quotes.

The exchange also prioritizes customer asset safety by storing almost 99% of all cryptocurrencies in cold storage wallets. Additionally, users can access professional-grade trade analysis and performance charts to make informed financial decisions.

Deribit’s user-friendly design and simple navigation make it accessible to all traders, while its mobile app for Android and iOS allows for trading on the go.

Services Offered by Deribit

Deribit provides a cryptocurrency derivatives exchange for Bitcoin and Ethereum, with all transactions executed in BTC but can be settled in either BTC or ETH. The exchange also offers an insurance fund to counteract potential losses from bankruptcy, though their strong margin maintenance system reduces the likelihood of such an occurrence.

Deribit prioritizes security, utilizing two-factor authentication, cold storage wallets, and session timeouts to safeguard customers’ assets. Additionally, their fee structure is highly competitive compared to other crypto exchanges and industry standards.

To improve the customer experience, Deribit runs a test server to identify glitches or bugs in their operations and ensure a seamless experience for users.

Deribit Account Creation Process

To sign up for Deribit, users must open an account by providing their email address, password, and country of residence. After receiving a confirmation email, users must complete an ID and KYC verification process before they can start trading.

Once the verification is complete, users can fund their accounts with BTC and begin placing trade orders.

Buying or Selling Cryptocurrencies with Deribit

Deribit offers users the ability to place perpetual swap orders or futures trading orders with fixed expiration dates. Trades are conducted in BTC or ETH, with settlements also in these currencies. However, withdrawals of customers’ cryptocurrency assets may take some time to process due to the majority being stored in cold wallets for enhanced safety. Only 1% of users’ assets are kept in hot wallets.

What Can You Trade at Deribit?

Deribit allows customers to trade in Bitcoin and Ethereum options and futures, as well as perpetual swaps. For each type of trading, investors can place three different types of orders: limit, stop-limit, and market orders. However, Deribit does not accept self-orders.

For futures trading with fixed expiration dates, there are weekly, monthly, or quarterly expires available. For options expires orders, there are a variety of choices including 1-2 daily, 1-3 weekly, 1-3 monthly, and 3-12 months for March, June, September, and December quarterly cycles.

Deribit Fees

Deribit does not impose any deposit fees for the deposit of Bitcoins and Ethereum, but a trading fee is charged for all trades using a maker-taker fee model for both futures and options trading in both Bitcoin and Ethereum. At the time of expiry, a small delivery fee is also charged for order execution.

A liquidation fee is also charged and automatically added to the user’s insurance fund. Withdrawal fees are subject to the condition of the blockchain network, and slow withdrawals may occur due to low hot wallet balances. Hot wallets are replenished daily for customers who have exhausted their hot wallet assets. Additional details can be found by clicking here.

Deribit Security

Deribit employs two-factor authentication to enhance security for users. With this feature, users who set up two-factor authentication at login can be assured that their Deribit account cannot be accessed even if their account password is compromised.

In addition, Deribit uses IP pining to terminate any sessions in which the user’s IP address changes. This helps prevent hackers from gaining access to user accounts. The exchange also utilizes session timeouts to automatically log out sessions after a certain period of time, increasing security in the event of device theft or damage.

Deribit further protects users’ digital assets by storing 99% of these assets in cold wallets that are not on the cloud, making it difficult for digital criminals to gain unauthorized access to these funds.

Deribit Customer Support

Deribit boasts a highly efficient customer support system. To seek assistance, users can submit a ticket detailing their problem and the support team will respond promptly to resolve the issue. For API-related inquiries or bug reporting, Deribit provides a specific email address for users to contact.

The exchange also values ethical hackers and rewards them generously through the Bug Bounty program for informing Deribit of any potential security breaches in their operational infrastructure. Additionally, Deribit’s customer support team can be reached via Telegram for added accessibility.

Deribit Review: Conclusion

Deribit, a cryptocurrency derivatives exchange, has been operating for several years without regulation. Despite this, it has gained the trust of numerous users who utilize its services regularly, resulting in mostly positive Deribit reviews. The only common complaints are regarding slow withdrawals and high internet speed requirements. While Deribit did experience a significant security breach and flash crash in 2019, it has since made a successful recovery and regained its reputation on a global level.