The valuation of the product is of course hard to predict, but that is the case for any asset. Don't get fooled, equity prices are not easier to predict than crypto currencies.
But I'm not talking about valuation here, but risk profile.
If a token value is at $100 and drops to $95, you lost 5%. This is intuitive and simple, there is no surprise or hidden risk. Everyone is able to understand the direct relationship between the price of the token and your portfolio valuation.
For derivatives, this is not the case. Depending on your leverage, maintenance margin, etc, a 10% drop in price of the contract can mean game over you lost 100% of your stake. This is the kind of complexity that you want retail investors to be protected against.
But I'm not talking about valuation here, but risk profile.
If a token value is at $100 and drops to $95, you lost 5%. This is intuitive and simple, there is no surprise or hidden risk. Everyone is able to understand the direct relationship between the price of the token and your portfolio valuation.
For derivatives, this is not the case. Depending on your leverage, maintenance margin, etc, a 10% drop in price of the contract can mean game over you lost 100% of your stake. This is the kind of complexity that you want retail investors to be protected against.