Layer 3 platform, Orbs Network enters a strategic collaboration with SYMMIO, an over-the-counter (OTC) derivatives platform, to enhance liquidity across on-chain derivatives platforms.
In an announcement this Thursday, Orbs, the open, public Layer 3 blockchain infrastructure, has announced a partnership with SYMMIO, an OTC derivatives platform. The strategic collaboration aims at solving the extensive problem of liquidity fragmentation across on-chain derivatives platforms. The solution by the two firms aims to boost overall liquidity across decentralized derivatives platforms and enhance capital efficiency by tapping into external liquidity.
Similar to Orbs’ blockchain- and DEX-agnostic Liquidity Hub, which aims to solve the issue of liquidity fragmentation across the decentralized finance field, the partnership with SYMMIO aims to roll out similar capabilities for derivative traders, facilitating more streamlined capital deployment and fostering robust growth within the sector.
The partnership aims to extend the capabilities and use cases of derivatives trading in DeFi, by building on Orbs Layer 3 technology. Some of the forward-thinking innovations in the pipeline following the partnership, include developing an on/off-chain communication oracle and creating a bidding system for hedgers. The latter aims to create a comprehensive framework for risk management while maximizing opportunities within derivatives trading.
Orbs x SYMMIO aim to grow on-chain derivatives trading
The crypto derivatives market leads the industry in trade volume, with centralized exchanges dwarfing its spot market counterpart to a ratio of 4:1. However, on-chain statistics from Glassnode show the complete opposite, with less than 4% of total trade volume of $62 billion attributed to the derivatives market. The latest partnership between Orbs and SYMMIO aims to address this imbalance, offering a more seamless trading infrastructure to on-chain traders.
The partnership will allow traders to open leveraged positions (similar to centralized exchanges), while efficiently utilizing their capital and allowing them to hedge against the massive volatility across crypto markets. The issue mainly arises from the lack of liquidity for hedge positions on decentralized exchanges, an issue SYMMIO aims to solve on the Orbs Layer 3 network.
To solve this, SYMMIO is launching an ingenious means of supporting intent-based OTC derivatives trading. When a user wishes to open a position to hedge their trades on a SYMM-powered front end, the platform sends direct quotes to a variety of hedgers available, making the process seamless and effective.
Simply, the user sets the parameters and SYMMIO’s front end selects the best quote for the trader, and then creates an intent that is transmitted on-chain. This 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.
Unlike current on-chain derivative platforms, SYMMIO’s solution allows hedgers to source liquidity from external parties including CEXs such as Binance, greatly improving the available liquidity and enhancing the capital efficiency on Orbs. The technology is expected to boost the overall adoption and liquidity levels on decentralized exchanges while providing a safer way for traders to gain exposure to on-chain derivatives.