On-chain crypto derivatives

Cryptocurrency derivatives are tradeable financial instruments that derive value from underlying crypto assets, allowing traders to gain exposure to price movement without owning the asset. Crypto derivatives function similarly to derivatives in traditional financial markets, with two parties entering into a contract that specifies terms such as quantity, price and validity period for the purchase or sale of the underlying asset. These contracts can be used to hedge large, long positions in specific crypto assets or to execute advancing trading strategies using leverage. For example, a Bitcoin mining company may sell futures contracts to hedge its natural long position in Bitcoin as it is creating Bitcoin but could in effect presell its future production. There is growing interest in crypto derivatives. One of the largest derivatives participants globally, Cboe, has just started to trade margined BTC and ETH futures. The derivatives market accounts for over over 70% of all retail buyi…