In this article we will tell you what FutureSwap is and what decentralized futures are.
What is FutureSwap?
FutureSwap is a project that has developed a decentralized Futures platform that allows taking positions with a maximum leverage level of 20 times. Currently, the leaders in Crypto Asset Futures are OKEx, Binance Futures, and Bitmex.
These markets play an important role in the crypto-asset market and are one of the most profitable businesses in the sector. In the graph, we can see the daily volume that exceeds 11 Billion Dollars, which explains the weight of the futures markets. But in times of high volatility in the markets in some of them, as in the case of Bitmex, the prices had wider movements that produced important liquidations of positions. This has generated a greater demand for more transparency in price formation.
FutureSwap is being introduced to bring transparency to one of the major types of activity, futures. While we have already seen decentralized versions of other activities such as brokers, in this case we are witnessing the birth of the version for the Futures market. In addition, its Crypto version will allow, as in other occasions, the facility to issue any type of future, something that will make this type of tool much more flexible in assets that in the real world cannot have due to the administrative burden they entail.
FutureSwap is born as an implementation of continuous futures for Ethereum / DAI that will allow leverage of up to 20 times. It will also issue an FST governance token.
Another great novelty in the sector is the possibility of offering liquidity to this type of market. It is an excellent opportunity to democratize access to this type of business and that any person can enter to have profitability by offering this liquidity. But not without risk, given that despite being a very profitable business, it also entails a significant exposure to these assets. In the end, there is no profitability without risk.
The product is in an alpha version, very experimental, and still in the process of being audited by Open Zeppelin, which still has to complete this audit, but the product is already operational and we have been able to see how the volume of 4.5 million in the last 24 hours.
At this moment the protocol has achieved liquidity of about 1 Million Euros. Data for the alpha launch speaks a lot about the potential of this project.
The extrapolated profitability at this moment is high, around 283% and it also has a remuneration program for participating in this initial phase and with so much risk.
As in other projects, we will also see the possibility of liquidating positions that have reached positions that have exceeded the margins. This also opens an interesting possibility of profitability, but also a risk of decapitalization of the system if these mechanisms do not work efficiently.
Decentralized Futures are certainly here to stay and it will be really interesting to follow the development closely.