How Can an Attacker Use Derivatives like Futures to Profit from a 51% Attack? ⎊ Path

How Can an Attacker Use Derivatives like Futures to Profit from a 51% Attack?

An attacker can open a short position using futures contracts on the target coin before launching the 51% attack. The attack causes network instability, a loss of trust, and a subsequent price crash.

The attacker profits handsomely from their short futures position as the price plummets. This strategy leverages the financial derivative market to monetize the technical attack, maximizing the return on their hashrate rental investment.

What Are the Implications of a 51% Attack for a Coin’s Derivatives Market, Such as Futures?

What Happens When the Funding Rate Is Positive versus Negative?

How Is the Direction of the Funding Payment Determined (Who Pays Whom)?

How Do Central Counterparty Clearing Houses (CCPs) Handle Member Defaults in Traditional Derivatives Markets?

What Is the Difference between a Perpetual Swap and a Traditional Futures Contract?

How Does a Successful 51% Attack Impact the Coin’s Market Price and Liquidity?

What Is the Difference between Contango and Backwardation in Perpetual Futures?

Can a 51% Attack Permanently Alter a Coin’s Underlying Protocol or Smart Contracts?

Glossar

Short Futures Position

Exposure ⎊ A short futures position in cryptocurrency derivatives represents the obligation to deliver an underlying asset at a predetermined price on a specified future date, inherently establishing a negative exposure to anticipated price increases.