CME Plots More DeFi Products Despite Broader Crypto Carnage

Benchmarks focused on Aave, Curve and Synthetix to offer institutions and others transparency and price discovery

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Pamela Brick/Shutterstock.com

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DeFi, for the most part, has held up better than more-centralized cryptocurrencies as ripple effects from FTX continue to spread throughout the asset class. TradFi is paying attention.

Case in point: CME Group and CF Benchmarks are rolling out institutional-grade tools for the price discovery of a handful of DeFi protocols. 

The new reference rates and real-time indexes — for Aave, Curve and Synthetix — are set to launch Dec. 19, the companies said in a statement Thursday. Bitstamp, Coinbase, Gemini, itBit, Kraken and LMAX Digital would initially supply corresponding pricing data.

The rates aim to price each digital asset in dollars daily, and each index is set to refresh once every second. Both types of tools, neither of which are tradable products, look to help institutions and others manage price risk around blockchain-based projects.

CME’s planned DeFi offerings come after the company launched 11 new cryptocurrency reference rates and indexes in April, including Uniswap — a decentralized exchange (DEX).

Along with the existing Uniswap reference rate and index, the three new benchmarks capture more than 40% of the total value-locked (TVL) of DeFi protocols that run on Ethereum, according to Giovanni Vicioso, CME’s global head of crypto products. 

“These rates are designed to provide traders, institutions and other users transparency and price discovery across a much broader range of tokens, allowing them to confidently and more accurately value cryptocurrency sector specific portfolios and manage price risk around various blockchain-based projects,” Vicioso said in a statement.

A CME spokesperson did not immediately return a request for additional comment.

A subsidiary of crypto exchange Kraken, CF Benchmarks is perhaps best known for its reference rates of bitcoin and ether, employed by CME Group to settle its digital asset futures contracts. CME Group began offering bitcoin futures contracts in 2017 and later launched ether futures in February 2021. The marketplace has expanded its crypto products throughout this year, bringing options on ether futures, for example, in September. 

CF Benchmarks CEO Sui Chung told Blockworks in August that the company had been fielding more calls from traditional financial institutions during the crypto winter than the crypto index provider received during the bull market.

BlackRock CEO Larry Fink said at the New York Times DealBook Summit Wednesday that he believes in crypto’s underlying technology —  despite the crash of crypto exchange FTX. He added that the tokenization of securities will play a key role when it comes to growth.


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