Layer 3 blockchain infrastructure platform Orbs welcomed the partnership of SYMMIO, an over-the-counter on-chain derivatives platform in a bid to boost liquidity in the on-chain derivatives market. In a press release this Thursday, the strategic partnership between these two platforms aims to grow the measly $2 billion on-chain derivatives market, enabling traders to make use of better capital efficiency and boost overall liquidity in the space, by tapping into external liquidity markets such as Binance.
The partnership aims to leverage Orbs Layer 3 technology to solve the issue of liquidity fragmentation and hedging difficulties that many on-chain traders face. The partnership will optimize efficiency in capital deployment across DEXs while driving more liquidity from external sources to ramp up liquidity in derivatives trading.
In addition, the two firms will also focus on developing new strategic use cases around derivatives trading, including developing on/off-chain communication oracles and creating a bidding system for hedgers, providing a way to reduce risk while capitalizing on the upside to derivatives trading.
While centralized exchanges remain dominant in the derivatives space, dwarfing their spot exchange counterparts by 4:1, the on-chain derivatives market has seen little to no growth since the launch of AMMs back in 2018. Today, just $2B out of $60B TVL on decentralized exchanges (DEXs) is attributed to derivatives. The strategic partnership between Orbs and SYMMIO aims to greatly reduce this imbalance, bringing extra liquidity to DEXs.
The partnership will empower traders by allowing them to take up leveraged positions while optimizing capital utilization and mitigating downside risks. This is expected to bridge the wide liquidity gap in on-chain derivatives trading and enhance the efficiency of trading derivatives on-chain.
SYMMIO set to solve on-chain derivatives trading dilemma
To solve the issue of low liquidity in on-chain derivatives trading, SYMMIO will employ an ingenious means of supporting intent-based OTC derivatives trading. Simply, a user will need to open a position on a SYMM-powered front end, and their quote is directly streamed by a variety of hedgers.
Afterwards, SYMMIO’s front end will select the best quote based on the user’s parameters and create an intent that is transmitted on-chain. his intent is accepted by the solver provided the parameters match their quote and the trade is executed on-chain, by which point both parties have locked collateral.
This is made possible as SYMMIO allows hedgers to get external liquidity from any available source, including centralized exchanges such as Binance. This is expected to increase overall capital efficiency while providing much greater liquidity to on-chain derivative traders.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
