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

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

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.