Arthur Hayes Biography
Developed perpetual contracts, making history for the first time;
3.12 Pulling out the network cable angrily, saving the universe for the first time;
YBS based on CEX makes history again;
Can the centralized universe be saved this time?
In 2025, 40-year-old Arthur Hayes was pardoned. Trump really does get things done when he is paid. Think about the $4.2 billion fine CZ was fined. How many memes would he have to post to earn it back?
This is different from Trump's idol Reagan. As a staunch fighter for capitalism and standard-bearer of neoliberalism, Reagan had a grander dream. He laid the ideological foundation for defeating the Soviet Union, but at the cost of deindustrialization of the United States and the West.
The fathers of the Chinese, Soviet (Russian), and South Africans we are familiar with, such as SpaceX founder Musk, Google founder Page, Binance founder CZ, and Ethereum founder Vitalik, all went to the West at this time.
Arthur Hayes, who later became world-famous, was born in Detroit, the automobile city of the United States, in 1985. The most glorious moment of his life came after he moved to Hong Kong, Singapore and other Asian regions.
Image caption: Crypto cycle Image source: @zuoyeweb3
• 2009-2013 Early Adoption
• 2013-2017 Infrastructure R&D
• 2017-2021 Application Trials
• 2021-2025 The last four-year cycle before the massive influx of users (if there is still a concept of cycle)
Everyone has his or her own clock in the coming and going, which constitutes the rhythm of Crypto, with Bitcoin - Ethereum - exchange - stablecoin forming the hours, minutes and seconds.
BitMEX and Arthur's entrepreneurship was concentrated in the second cycle of Bitcoin from 2013 to 2017. In addition to the mining industry, exchanges became the track with the greatest wealth effect. Before March 12, 2020, BitMEX was the undisputed king of crypto trading, followed by CZ, SBF and others.
Although Bitcoin is no longer the center of the crypto universe, and the increasingly fragmented industry consensus has made Arthur Hayes far less well-known than Justin Sun and others, the two are actually rivals now, as the stablecoin super cycle arrives.
Arthur is also one of the few who was able to start a second business after his success. Unlike simple business expansion, the emergence of Ethena has brought the stablecoin track back to life. This is also the first time that DeFi products on the CEX/USDC chain can be reversed. We cannot assert success yet, but it is at least interesting enough.
Arthur Hayes happens to be an interesting enough guy.
Black Americans' Hong Kong Years
There is no wasted journey in life, every step counts.
Arthur Hayes was born in Detroit, but his parents moved to Buffalo for his education. He went to a famous private school and entered the elite training track, which gave him a very good starting point. A good starting point + the right track = a smooth life.
But we have to say that Hayes is a very rebellious person at heart. Let me first make a judgment that he is "a passive resister of Pax Americana and a modern heir of classical liberalism."
This is why he chose to abandon the United States and go to Hong Kong. After that, Ethena was against legal currency but not against CEX. Moderate compromise is acceptable, but extreme obedience is unbearable.
In 2004, Hayes ended his private school career and successfully entered the Wharton School of the Pennsylvania State University.
Arthur has never seen Los Angeles at 4 a.m., but he often goes to the gym at 5 a.m. and has won the title of "Mr. Penn". He has taken a different life path from alumni such as Trump, Justin Sun, Musk, and Buffett. He first dreams of becoming a billionaire and then making 100x his wealth.
In subsequent reports, Hayes said that he often fantasized about the future at dawn, and was confident that God would give him great responsibilities. In his subsequent choice of path, Hayes did not follow the beaten path and chose either Manhattan or Wall Street.
Either travel three thousand miles on water, or in Victoria Harbour.
In 2007, Hayes followed the established elite career path for finance and business students. He did a Big Name Summer Internship in investment banking/consulting in his junior year, and started working directly after graduation in his senior year. This top school is the most favored target school for investment banks, so it was a very smooth two-way journey. The only unusual thing was that Hayes chose to go to Asia and Hong Kong.
In 2008, a young man came to the trading department of Deutsche Bank. Note the timing: Lehman Brothers was about to go bankrupt, and Hayes’ name was obviously not on the Too Big To Fall (TBTF) list. Fortunately, he was not on the layoff list either, and thus began his hard-working career as a derivatives trader.
Three years later, Hayes moved to Citigroup, still doing familiar derivatives trading, Delta One trader. Derivatives, trading, market makers, BitMEX was missing one of the three elements at that time, and Bitcoin had not yet entered life, but the seeds of Delta Neutral had been quietly planted.
It feels like many celebrities currently active in the top cryptocurrency circles entered the circle in 2013, including CZ, Sun Ge, and Hayes. This is not surprising. At the end of the first cycle of Bitcoin and the beginning of the second cycle, the wealth effect was initially launched.
In 2013, the European debt crisis became more serious, Hayes lost his job, and the fiat currency crisis was an opportunity for Bitcoin. Hayes discovered the contract arbitrage model from Mentougou spot to ICBIT, hedging, arbitrage and speculation. The contract spirit of futures traders skyrocketed instantly. At that time, the crypto derivatives market was very small, far less than the scale of spot transactions.
It just so happens that the kimchi premium is not a new product between the mainland and Hong Kong, between the East and the West, and between the world and South Korea. It has been strong since the birth of Bitcoin. Hayes described himself as doing spot arbitrage between the mainland and Hong Kong, and transporting the cash earned from mainland exchanges to Hong Kong by backpack.
Personally, I have my doubts about this matter, it is more likely to be a "group" operation, but starting at this time, it is not a big problem.
Of course, such capital efficiency is too low, so it is better to become the market yourself. The story of BitMEX and perpetual contracts is about to unfold.
Cryptocurrency transformation of perpetual contracts
The king of US-funded exchanges in the pre-Binance era.
How to beat the market is the common dream of every investor, every fund and sleepless trader. The two-way fluctuations of the market make it unpredictable, so there are only two choices: either invest in the entire market or provide a trading market.
Hayes chose the exchange this time, but entered the game as a perpetual contract.
After the disappearance of Mt. Gox, between 2013 and 2017, the global crypto market was strictly divided into only the Chinese mining industry, the Chinese spot trading market and other trading markets. The derivatives market, both on-chain and off-chain, could only sit at the children's table.
The exchanges were dominated by Chinese backgrounds. That is, from this time on, Li Lin's Huobi and Xu Mingxing's OKCoin were ready, Bitfinex began to cooperate with USDT, ICBIT developed a reverse contract, Coinbase gradually became retail-friendly, and Kraken focused on security issues.
In 2014, 28-year-old Hayes, Ben Delo and Samuel Reed founded BitMEX, an exchange dominated by derivatives trading rather than spot trading.
According to its own account, BitMEX earned more than $1 billion in revenue in the first year. Similar to Binance and Hyperliquid, it grew rapidly and aggressively. The aggregation effect of money itself is the strongest, and it will always rush towards self-added value.
A free spirit is a spirit that is not so sure about what is right.
Futures contracts have the characteristics of unlimited leverage and delivery upon expiration. At first, users often complained to the platform that their positions disappeared inexplicably because they did not understand the meaning of expiration. Hayes and Ben Delo wondered if it was possible to directly remove the expiration feature and allow users to manually close their positions.
This is not a fantasy. The spot trading of cryptocurrency is 24/7, which is very different from the traditional financial market. In 2011, ICBIT had developed the reverse contract product, which is where Hayes made his first fortune.
Hayes combined the 24-hour trading characteristics of cryptocurrency spot, the leverage of futures contracts, and improvements to the expiration date. Ultimately, the perpetual cryptocurrency futures contract was born. This is the perpetual contract we are most familiar with today.
Almost anything can be achieved if intelligence is combined with some experimental equipment.
Next, it was the leverage war. We, a group of crypto gamblers, really lived up to our reputation. BitMEX turned losses into profits only after adjusting the leverage to 50 times, and then adjusted it to 100 times, which means that the maximum position that can be opened with one BTC as margin is 100 BTC. Eventually, high leverage became the signature of the exchange, and 100x Group also became the name of BitMEX's parent company.
Since May 2016, BitMEX has become the undisputed king of CEX. Even Binance in 2017 was only the king in the spot field, and derivatives did not start to compete head-on with BitMEX until 2019.
In other words, BitMEX took three steps right: first, it made derivatives among many spot exchanges; second, it increased leverage; and third, it invented today's perpetual contract products.
But it has to be said that Binance is a bit lucky. In the March 12 incident in 2020, Hayes became a controversial hero who angrily pulled out the network cable, just like the recent Hyperliquid. I will not go into details. You just need to know that if the network cable is not pulled out, Bitcoin may once again experience the sluggishness after Mt. Gox for many years.
In this way, until 2019, arrogance became Hayes' biggest label, and BitMEX's products were able to retain most of the market share and money-making ability even during the bear market.
Fear is the instinct of living things, and courage is the hymn of mankind.
Hayes' high profile is not only in the face of the market, but also in the face of regulation. When asked what the difference is between the United States and Seychelles, Hayes' response is that bribes in the United States are more expensive, while in Seychelles all it takes is a coconut.
A week after the arrogant speech, the CFTC began investigating BitMEX on charges of being a non-US registered exchange and the familiar allegations of money laundering. Ultimately, one cannot provoke the regulatory authorities, otherwise everyone will follow suit and total disorder will be the result. However, Jack Ma does not seem to have learned the lesson from Hayes.
After living like this for a year, Hayes resigned as CEO of BitMEX in 2020. In 2021, after negotiating a plea agreement, BitMEX paid a fine of $100 million. In 2022, Hayes personally paid a fine of $10 million, plus six months of home confinement.
However, CZ and SBF also went to jail one after another, and the three gods of derivatives all ended up in jail. From 2014 to 2020, BitMEX was everything for Hayes. His previous work experience seamlessly switched to the entrepreneurial field with almost no twists and turns and pain.
Hayes is a demigod of the 13-17 cycle, a master of the pre-Binance and USDT era, a believer in Bitcoin, but not a blind follower. He is different from the early mining practitioners. Li Lin, CZ, and SBF who are engaged in exchanges are almost all more flexible and have more flexible ideas about Bitcoin and decentralization. This is also very normal. They make money by trading, not hoarding coins.
But Hayes did not stop. The gift of the 21-25 year cycle is Ethena, which is a differentiator in the era of Binance and USDT. The core concept is to embrace CEX such as Binance and seize the market of USDT.
The emerging white knight
Big things have small beginnings.
A scientist's most "important" discovery is often his first discovery; conversely, an artist's most profound creation is often his last.
Obviously, Hayes, who is proficient in mathematics and writing, is a mixture of a scientist and an artist. The experience accumulated in the past will not necessarily make Hayes more powerful in the stablecoin track, but it is certain that only mediocre abilities are definitely of no value.
In 2023, Hayes published an article envisioning a stablecoin system based on BTC contract rates, that is, BTC shorts in Perp CEX hedge the fluctuations in the BTC spot value on the chain, the so-called Delta neutrality.
In this way, in the most ideal case, the BTC deposited by users on the chain can be minted into equivalent stablecoins at a 1:1 ratio, which can not only get rid of the low capital utilization rate of over-collateralization of products such as DAI, but also get rid of the opaque mechanism of USDT, that is, the risk of holding USDT belongs entirely to retail investors, while the income from issuing USDT belongs entirely to Tether.
In Hayes' vision, the most important thing is the cooperation with Perp CEX. Given that BitMEX has become a thing of the past, the support of Binance, OKX and Bybit is the most important. Once again, he is not against legal currency or banks, but rebellious in his compromise.
In essence, the introduction of CEX is to give them the right to issue currency (coinage) and the right to share the seigniorage. Think about the profit sharing that Circle gives to Binance and Coinbase. This is actually not difficult to understand. However, it is also dangerous for the exchange to support the stablecoin. Even BUSD and FDUSD will face the crisis of decoupling and bank runs.
Image description: Stablecoin classification Image source: @zuoyeweb3
Arthur Hayes's family office MaelStorm became the founding advisor of Ethena in 2023. The difference of Ethena at this time is that it uses ETH as the underlying asset instead of BTC. Because stETH and other assets have their own returns, with the help of Hayes, mainstream CEXs have also entered the market. It can be said that without Hayes, Ethena would definitely not have its current market position.
Compared with products such as DAI and crvUSD, USDe is indeed not decentralized enough. After all, its foundation is the cooperation of exchanges, but the advantage is that part of the profits of USDT/USDC will be distributed to users;
Compared with its peers such as Level and Usual, the significance of USDe is similar to that of Uniswap. The product that first verifies the possibility has its own "legitimacy". Compared with various newly launched compliant stablecoins, Ethena is a more on-chain YBS (Yield Bearing Stablecoin) product.
Will stablecoins be the super hit in 2025?
Regarding this, I am sure I have an incomplete solution, but unfortunately the space here is too small to write it down. I will leave it for the future of YBS/stablecoin to be fully discussed later.
Conclusion
Einstein completed the general theory of relativity at the age of 28, and then he spent his whole life denying and attacking quantum mechanics. He never completed the unified field theory in his entire life.
In February 2024, BitMEX was revealed to be seeking buyers, and in September, Ethena announced a partnership with BlackRock’s BUIDL. In the turbulent 2025, more of Ethena’s reserves have become fiat stablecoins such as USDC, just as DAI later operated.
After Arthur Hayes successfully started his own business at BitMEX-Perp, he is still obsessed with in-depth writing and the exploration of new mechanisms. Ethena is just a stop on his journey, or the end of eternity.
However, the greatest fortune of a person is to discover his life mission during his life journey, in his most creative prime. I hope you and I can do the same.
