Arthur Hayes Biography
Written by: Zuoye
Developed perpetual contracts, creating history for the first time;
On March 12, angrily pulled the plug, saving the universe for the first time;
Based on CEX's YBS, creating history once again;
This time, can it save the centralized universe?
At 40 years old in 2025, Arthur Hayes was granted clemency. Trump indeed gets things done if you pay him; think about how much meme-making it would take to recover from CZ's $4.2 billion fine.
This is different from Trump's idol, Reagan. As a staunch capitalist fighter and a banner bearer of neoliberalism, Reagan had grander dreams, laying the ideological foundation for defeating the Soviet Union, albeit at the cost of deindustrializing America and the West.
The familiar figures from China, Russia, and South Africa, such as SpaceX founder Musk, Google founder Page, Binance founder CZ, and Ethereum founder Vitalik, all had parents who moved to the West during this time.
The future renowned Arthur Hayes was born in 1985 in Detroit, the American automotive city, and his glorious moments in life came after moving towards Asia, such as Hong Kong and Singapore.
Image Caption: Crypto Cycle
Image Source: @zuoyeweb3
2009-2013 Early Adoption
2013-2017 Infrastructure Development
2017-2021 Application Attempts
2021-2025 The last four-year cycle before a massive influx of users (if the concept of cycles still exists)
In the ebb and flow, everyone has their own clock, forming the rhythm of Crypto, composed of Bitcoin—Ethereum—exchanges—stablecoins.
BitMEX and Arthur's entrepreneurship focused on the second Bitcoin cycle from 2013 to 2017. Beyond the mining industry, exchanges became the most wealth-generating track. Before March 12, 2020, BitMEX was undoubtedly the king of crypto trading, followed by CZ and SBF.
Although Bitcoin is no longer the center of the crypto universe, the increasingly decentralized industry consensus means Arthur Hayes is not as well-known as figures like Sun Yuchen. However, the two are actually rivals now, as the super cycle of stablecoins approaches.
Arthur is also one of the few who can start a second venture after achieving success. Unlike simple business expansion, the emergence of Ethena has reignited the stablecoin track, marking the first time to leverage CEX/USDC to nurture DeFi products on-chain. We cannot assert success yet, but it is at least interesting enough.
Arthur Hayes is indeed a sufficiently interesting person.
The Hong Kong Years of an American Black
Life has no wasted paths; every step counts.
Arthur Hayes was born in Detroit, but his parents moved to Buffalo for education, enrolling him in a prestigious private school, setting him on a path of elite cultivation, giving him a very good starting point. Good starting point + correct path = a smooth life.
However, it must be said that Hayes is inherently very rebellious. To make a judgment, he is "a passive resistor of Pax Americana, a modern heir of classical liberalism."
This is reflected in his choice to leave America for Hong Kong, and later Ethena's anti-fiat but not anti-CEX stance, where moderate compromise is acceptable, but extreme obedience is intolerable.
In 2004, Hayes ended his private school career and smoothly entered the Wharton School of the University of Pennsylvania.
Arthur has never seen Los Angeles at four in the morning, but he often hits the gym at 5 AM and even won the title of "Mr. Penn." He walked a different life path from alumni like Trump, Sun Yuchen, Musk, and Buffett, first dreaming of becoming a billionaire, then achieving a 100x fortune.
In later reports, Hayes mentioned that he often envisioned the future at dawn, exuding confidence that he was destined for great responsibilities. In his subsequent choices, Hayes also took an unconventional route, choosing between Manhattan or Wall Street.
Or splashing through three thousand miles, or in Victoria Harbour.
In 2007, Hayes embarked on the established elite career path for finance and business students, landing a summer internship at a big-name investment bank/consulting firm in his junior year, and directly joining upon graduation in his senior year. Especially for top schools, this is the target school most favored by investment banks, a smooth two-way journey. The only unusual aspect was that Hayes chose to go to Asia, to Hong Kong.
In 2008, a young man joined the trading department of Deutsche Bank. Note the timing: Lehman Brothers was about to collapse, and Hayes's name was clearly not on the Too Big To Fall (TBTF) list. Fortunately, he was also not on the layoff list, thus beginning his career as a derivatives trader.
Three years later, Hayes switched to Citigroup, still in familiar derivatives trading as a Delta One trader. Derivatives, trading, market-making—at this point, BitMEX was missing one of these elements. Bitcoin had not yet entered daily life, but the seeds of Delta Neutral had already been quietly sown.
It seems many of the prominent figures currently active in the crypto space entered the scene in 2013, including CZ, Sun Yuchen, and Hayes. This is not surprising, as it was the end of the first Bitcoin cycle, transitioning into the beginning of the second cycle, with the wealth effect starting to take shape.
In 2013, as the European debt crisis worsened, Hayes became unemployed. The fiat currency crisis was Bitcoin's opportunity. Hayes discovered an arbitrage model between spot trading in Mentougou and ICBIT, involving hedging, arbitrage, and speculation, causing the contract spirit of futures traders to surge. At that time, the crypto derivatives market was small, far less than the scale of spot trading.
Coincidentally, the kimchi premium was not a new phenomenon between the mainland and Hong Kong, the East and the West, and the world and South Korea. It had remained strong since Bitcoin's inception. Hayes recounted arbitraging between the mainland and Hong Kong, using cash earned from mainland exchanges, transported by backpack to Hong Kong.
I personally have doubts about this; it is more likely a "group" operation. However, starting out at this time is not a big issue.
Of course, such capital efficiency is too low; it is better to become the market directly. The story of BitMEX and perpetual contracts is about to unfold.
The Transformation of the Crypto Circle through Perpetual Contracts
The king of American-funded exchanges before the Binance era.
How to conquer the market is a common dream for every retail investor, every fund, and every sleepless trader. The bidirectional fluctuations of the market lead to unpredictability, so one can only choose one of two options: either invest in the entire market or provide a trading market.
This time, Hayes chose the exchange, but entered the market as a perpetual contract.
After the dream vanished with Mt. Gox, between 2013 and 2017, the global crypto market was strictly divided into the Chinese mining industry, the Chinese spot trading market, and other trading markets. The derivatives market, whether on-chain or off-chain, could only sit at the children's table.
The Chinese background of exchanges dominated from this point on. Li Lin's Huobi and Xu Mingxing's OKCoin were both well-prepared, while Bitfinex began collaborating with USDT, ICBIT developed reverse contracts, Coinbase gradually became retail-friendly, and Kraken focused on security issues.
In 2014, 28-year-old Hayes, along with Ben Delo and Samuel Reed, founded BitMEX, an exchange dominated by derivatives trading rather than spot trading.
According to their account, BitMEX earned over $1 billion in revenue in its first year, similar to Binance and Hyperliquid, rapidly gaining volume and strength. The gathering effect of money itself is the strongest, always rushing towards self-appreciation.
The spirit of freedom is a spirit that is not so certain about what is right.
Futures contracts possess the characteristics of unlimited leverage and expiration delivery. Initially, users often complained to the platform that their positions mysteriously disappeared due to not understanding the meaning of expiration. Hayes and Ben Delo wondered if there was a possibility to eliminate the expiration feature, allowing users to manually settle their positions.
This was not a fantasy; cryptocurrency spot trading operates 24/7, distinctly different from traditional financial markets. In 2011, ICBIT had already developed the reverse contract product, which is where Hayes struck gold for the first time.
Combining the 24/7 trading characteristics of cryptocurrency spot markets, the leverage of futures contracts, and improvements to the expiration date, the perpetual cryptocurrency futures contract was born, which is what we now know as perpetual contracts.
As long as wisdom is connected with certain experimental devices, almost anything can be realized.
Next came the leverage war; we crypto gamblers truly live up to our name. BitMEX only turned profitable after adjusting leverage to 50x, later increasing it to 100x, meaning that a single BTC used as margin could open a maximum position of 100 BTC. Ultimately, high leverage became the exchange's signature, and 100x Group became the name of BitMEX's parent company.
Starting in May 2016, BitMEX became the undisputed king of CEX, even though Binance in 2017 only ruled the spot market; derivatives did not begin to compete head-on with BitMEX until 2019.
In other words, BitMEX took three correct steps: first, it focused on derivatives among many spot exchanges; second, it increased leverage; and third, it invented the perpetual contract product we know today.
However, it must be said that Binance had a bit of luck on its side. During the March 12, 2020 event, Hayes became the controversial figure who pulled the plug, similar to the recent Hyperliquid situation. It is unnecessary to elaborate; just know that if the plug had not been pulled, Bitcoin might have faced years of stagnation after the Mentougou incident.
Thus, until 2019, arrogance became Hayes's biggest label. Even during the bear market, BitMEX's products retained a significant market share and capital-raising ability.
Fear is a biological instinct; courage is humanity's anthem.
Hayes's boldness was not only directed at the market but also at regulators. When asked about the difference between the U.S. and Seychelles, Hayes responded that bribing in the U.S. is more expensive, while in Seychelles, it only takes a coconut.
A week after his audacious remarks, the CFTC began investigating BitMEX, charging it as a non-U.S. registered exchange and familiar money laundering allegations. Ultimately, one cannot provoke regulatory agencies; otherwise, everyone will follow suit, leading to complete disorder. However, it seems Jack Ma did not learn from Hayes's lesson.
After living this way for a year, in 2020, Hayes resigned as CEO of BitMEX. In 2021, after negotiating a plea agreement, BitMEX paid a $100 million fine, and in 2022, Hayes personally paid a $10 million fine, along with six months of home confinement.
However, CZ and SBF also stepped into prison one after another, marking the end of the trio of derivatives gods, all incarcerated. From 2014 to 2020, BitMEX was everything for Hayes; his previous work experience transitioned seamlessly into the entrepreneurial realm, with almost no setbacks or pain.
Hayes is a demigod of the 2013-2017 cycle, a culmination of the pre-Binance and USDT era, a believer in Bitcoin but not a blind follower. He differs from early miners; figures like Li Lin, CZ, and SBF, who engaged in exchanges, are generally more flexible and adaptable to the concepts of Bitcoin and decentralization. This is quite normal, as they earn money through trading rather than hoarding coins.
However, Hayes did not stop there. The gift of the 2021-2025 cycle is Ethena, a differentiator in the era of Binance and USDT, with the core idea of embracing CEXs like Binance to capture the market of USDT.
The Emerging Stable Knight
Big things have small beginnings.
A scientist's most "important" discovery is often his first; conversely, an artist's most profound creation is usually his last.
Clearly, Hayes, who is proficient in both mathematics and writing, is a hybrid of a scientist and an artist. The accumulated experiences may not necessarily make Hayes more formidable in the stablecoin arena, but it is certain that possessing only mediocre abilities is of no value.
In 2023, Hayes published an article envisioning a stablecoin system based on BTC contract rates, where BTC in Perp CEX hedges against the volatility of on-chain BTC spot value, known as Delta Neutral.
In this ideal scenario, users can deposit BTC on-chain and mint an equivalent stablecoin at a 1:1 ratio, freeing themselves from the low capital utilization of over-collateralized products like DAI, while also escaping the opaque mechanisms of USDT, where the risks of holding USDT entirely belong to retail investors, while the profits from issuing USDT belong solely to Tether.
In Hayes's vision, the most important aspect is collaboration with Perp CEXs. Given that BitMEX has become a thing of the past, support from Binance, OKX, and Bybit is crucial, once again embodying a stance that is anti-fiat but not anti-bank, a rebellion wrapped in compromise.
Essentially, introducing CEXs grants them the right to issue currency (minting rights) and share in the minting tax revenue. Think about the revenue sharing Circle provides to Binance and Coinbase; this is not hard to understand. However, the exchanges supporting this stablecoin also face risks, as even BUSD and FDUSD can encounter de-pegging and liquidity crises.
Image Caption: Classification of Stablecoins
Image Source: @zuoyeweb3
Arthur Hayes's family office, MaelStorm, became a founding advisor for Ethena in 2023. At this point, Ethena distinguishes itself by using ETH as the underlying asset instead of BTC, as stETH and others come with yield. With Hayes's assistance, mainstream CEXs have also entered the fray. It can be said that without Hayes, Ethena would not have the market position it holds today.
Compared to products like DAI and crvUSD, USDe is indeed not decentralized enough, as its foundation relies on the cooperation of exchanges. However, the benefit is that it will share some profits from USDT/USDC with users.
Compared to peers like Level and Usual, USDe's significance is akin to Uniswap; it first validates the possibility of a product that carries "orthodoxy." In contrast to various newly launched compliant stablecoins, Ethena is a relatively on-chain YBS (Yield Bearing Stablecoin) product.
Will stablecoins be the super hit of 2025?
Regarding this, I am confident I have an incomplete solution. Unfortunately, the blank space here is too small to fill, so I will leave it for a later discussion on the future of YBS/stablecoins.
Conclusion
At 28, Einstein completed the theory of general relativity, but afterward, he spent his life in denial and attack against quantum mechanics, never completing a unified field theory.
In February 2024, it was reported that BitMEX was seeking buyers, and in September, Ethena announced a partnership with BlackRock's BUIDL. In the tumultuous year of 2025, Ethena's reserves have increasingly become fiat stablecoins like USDC, similar to DAI's later operations.
After successfully founding BitMEX-Perp, Arthur Hayes remains immersed in deep writing and exploring new mechanisms. Ethena is merely a stop on the new journey of seeking knowledge, or perhaps an eternal conclusion.
However, the greatest fortune for a person is to discover their life mission during their most creative and prosperous years. May we walk this path together.
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