Summary
Let’s talk about FX derivatives and its use.
Motivation
Trading FX after hours is a great start, but it must not be the only attractive quality of DFX. I believe Futures could be the start of something big. Not everyone wants to KYC/AML into CEXs to access those features. DFX could be the $PERP of FX. Swaps are great, but it’s a really congested market. We need to differentiate ourselves from the rest of the pact.
Specifications
We could fork another great, battle-tested project and implement DFX’s currencies if that suits the community. Otherwise, it could be written from scratch. Another facet on top of swaps would most definitely increase DFX exposure.
For
If voted, we would need a derivatives app with a terminal, order books, etc. As mentioned previously, this could be either coded from scratch or forked.
Against
If the community do not see the value of Derivatives, then ask yourself (and hopefully come up with a proposal) what else could attract people to decentralized FX.
I personally think FX derivatives are going to move on-chain eventually. This proposal might take a bit more time to flush out as this is quite a major deviation from the current AMM. This would require spec-ing out the technical feasibility and determine if current liquidity levels in the foreign stablecoins can handle that kind of system.
If we look to fork an existing protocol, which protocol is open-source and have the features required to make this happen? Some form of technical due diligence is probably required.
yeah sounds interesting, but I think there are other things DFX should focus on first. Seems like an entire project on it’s own to offer derivatives trading. I would prefer to focus on spot trading for now and growing the community/make DFX better known. And implement more trading pairs, maybe all the ib (ibCHF, ibGBP, ibKRW etc.) from yearn/AC. AFAIK right now its not possible to trade ibCHF to USDC for example.
The only way to make decent return in FX is to leverage. Spot trading, imo, isn’t going to bring anything useful by itself. If we’re going to create an orderbook/fork it to bring “spot” trading, we might as well walk the extra mile and find a way to implement derivatives. It is, imo, the best way to attract traditional traders. The only attraction we currently have is Arbitrage… which is cool but it is extremely basic.
Another proposition (yet not as attractive) in terms of derivatives would be Leveraged tokens, like BTC3L on MXC for example. The downside of this is that we have to create new liquidity which is already an issue with some of our current stablecoins.
I agree, however, that we need more trading pairs and more stablecoins.