Ben Strack

<div id="highlights-block_6320d9c22c899" class="highlights">
 <ul>
 <li>Average daily volume for CME Group’s ether futures contracts in September is up 15% from August</li>
 <li>A record 288,000 crypto futures contracts traded on Coinbase’s platform on Sept. 9</li>
 </ul>
 
</div>



Demand for ether futures contracts and other crypto derivatives is surging just days before <a href="https://cms.blockworks.co/the-investors-guide-to-the-ethereum-merge/" target="_blank" rel="noreferrer noopener">the Merge</a> — the Ethereum blockchain’s pivot from proof-of-work to a proof-of-stake-powered consensus mechanism.



CME Group’s ether futures contracts have seen rising average daily volume and open interest so far this month, while Coinbase is reporting crypto derivatives volume records after its launch of nano ether futures.



Throughout September, CME Group’s ether futures contracts have notched average daily volume (ADV) of 7,100 contracts, the company told Blockworks Monday — up 15% from August. Average daily open interest (ADOI) for the contracts stands at 4,400, a 10% increase from last month.



The number of large open interest holders — defined as market participants holding 25 or more contracts — reached all-time highs for ether futures and micro ether futures last week, with 62 and 139 such holders, respectively, a company spokesperson told Blockworks.



Despite climbing demand for ether futures, ADV and ADOI for CME Group’s micro ether futures contracts — sized at 0.1 ETH ($160) — were down 12% and 9% in September, respectively, when compared to August.



Though ADV for the derivatives marketplace’s micro ether options was 2,100 contracts — a 59% reduction from August — ADOI for the product was roughly 112,000, up 43% month over month.



CME Group’s micro ether options had an ADV of roughly 5,260 contracts in August, up more than 130% from July. Open interest in those products averaged a record of 75,959 contracts — up about 135% from the month prior — reaching an all-time high of 124,814 contracts on August 30.



The company launched options on ether futures Monday. The new contracts — based on the <a href="https://www.cmegroup.com/markets/cryptocurrencies/cme-cf-cryptocurrency-benchmarks.html?redirect=/trading/cryptocurrency-indices/cf-ethereum-reference-rate.html" target="_blank" rel="noreferrer noopener">CME CF Ether-Dollar Reference Rate</a> — deliver 1 ETH ($1,600) futures, sized at 50 ETH ($80,000) per contract.&nbsp;



Tim McCourt, the company’s global head of equity and foreign exchange products, said the new offerings would complement CME Group&#8217;s ether futures — first offered in February 2021 — that have seen a 43% increase in average daily volume year over year.



&#8220;The launch of our new ether options contracts is particularly well-timed to provide the crypto community with another important tool to gain access to and manage exposure to ether,” he said in a statement.



<h3>Coinbase derivatives already a success</h3>



Coinbase’s derivatives exchange had a record volume day on Sept. 9, just weeks after launching its nano ether futures contracts.&nbsp;



Sized at one-tenth of an ether, <a href="https://blog.coinbase.com/coinbase-derivatives-exchange-to-add-nano-ether-futures-contract-1bb88ef51b3e" target="_blank" rel="noreferrer noopener">the contracts were introduced</a> on Aug. 29. The launch followed Coinbase making available nano bitcoin futures contracts — sized at 0.01 BTC ($205) — in late June. 



A combined 288,000 crypto futures contracts — 178,000 BTC contracts and 110,000 ETH contracts — traded on its platform last Friday, according to Coinbase, marking an all-time high.&nbsp;



More than 200,000 nano bitcoin futures and 85,000 nano ether futures contracts had traded on Tuesday, as of noon ET, a company spokesperson told Blockworks.



The nano ether futures are available through retail brokers EdgeClear, Ironbeam, NinjaTrader, Optimus Futures, Stage 5 and Tradovate, as well as several clearing firms. Coinbase is awaiting approval to offer futures directly to clients.



<a href="https://cms.blockworks.co/the-merge-completely-changes-ethers-investment-case-for-institutions/" target="_blank" rel="noreferrer noopener">Industry watchers told Blockworks</a> that sustainability-minded institutions — such as such as pension funds and insurance companies — are likely to gravitate toward ether going forward, as the blockchain’s energy consumption is expected to decrease by about 99.9% after the Merge.



Ben Dean, director of digital assets at WisdomTree in Europe, said at the time that the blockchain’s transition to proof-of-stake “completely changes the investment case” for the asset.



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Interest in Ether Derivatives Surges Ahead of Merge

<div id="highlights-block_6307c073fdf3c" class="highlights">
 <ul>
 <li>Company’s near-term focuses include adding margin-based futures contracts, market data tools, executives said</li>
 <li>“We very intentionally established a diverse group of partners,” Cboe Chief Strategy Officer John Deters said</li>
 </ul>
 
</div>



Cboe Global Markets is bringing aboard a slate of equity partners to help grow its digital assets business, just months after closing its acquisition of <a href="https://www.erisx.com" target="_blank" rel="noreferrer noopener">ErisX</a>.



The company is seeking to build out its crypto spot and futures capabilities to fill what executives called “a massive gap” in the space of offering market intermediaries a trusted venue for its retail and institutional clients.



ErisX operates a US-based digital asset spot market, as well as a futures exchange and clearinghouse regulated by the Commodity Futures Trading Commission (CFTC). <a href="https://www.cboe.com" target="_blank" rel="noreferrer noopener">Cboe</a>, which owns the world’s largest options exchange, <a href="https://cms.blockworks.co/cboe-sees-need-to-move-quickly-in-crypto-following-exchange-acquisition/" target="_blank" rel="noreferrer noopener">closed its acquisition</a> of the company in May as a way to enter the digital asset spot and derivatives marketplaces and is set to rebrand ErisX to Cboe Digital.



The new planned partners, each of which intend to take minority stakes in Cboe, are B2C2, DRW, GSR, Hidden Road, IMC, Interactive Brokers, Jane Street, Jump Crypto, Optiver, Robinhood, tastytrade and Virtu Financial. Executives did not reveal the specific size of the stakes.



The investors join other previously announced partner firms, such as Fidelity Digital Assets, Galaxy Digital, NYDIG and Webull. Cboe plans to form a digital advisory committee comprising the partner firms.



The incoming group of partners includes retail order flow providers, some of the largest market makers in the spot crypto world and other market makers focused more on derivatives pricing and trading, Cboe Chief Strategy Officer John Deters told Blockworks.&nbsp;



“We very intentionally established a diverse group of partners,” he said. “It’s that kind of mix which creates, we think, an ideal and healthy blend of participants, each with a little bit different focus and coming together simultaneously to make a vibrant and liquid market.”&nbsp;



<h3>ErisX and Cboe product roadmap</h3>



ErisX offers cash-settled futures contracts on bitcoin and ether. It offers spot trading on bitcoin, ether, bitcoin cash, litecoin and USD Coin.



In terms of the company’s product roadmap, ErisX President John Palmer told Blockworks that its “next push” is getting CFTC approval to trade margin-based futures contracts. Cboe hopes to roll those products out by the end of the year, he said.



Into 2023 and 2024, the firm will seek to offer additional futures contracts and spot trading for tokens beyond the five digital assets currently offered. Though Palmer did not name specific assets it would seek to offer, it noted that it would be considering other “top-traded tokens.”



“We certainly want to offer that very quickly and have a platform where participants can trade spot and derivatives and really get the benefit of capital efficiencies by having these things all clear at our clearinghouse,” Palmer said.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



Using market data based on actionable bid and offer prices from the spot crypto market, Cboe Digital also plans on developing a benchmark data stream to help market participants evaluate crypto execution prices, Deters said.



“Our industry is going digital over the long-term, and so making sure that our platform is built for that future, that we’re helping market participants and our clients engage in the market and helping them figure out opportunities to digitizing and interacting with their products is a “mission-critical” initiative for us and will keep us busy for quite a bit of time to come,” Deters said.



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Cboe To Add Slate of Partners to Grow Digital Asset Business

<div id="highlights-block_62e18632d4166" class="highlights">
 <ul>
 <li>Average daily open interest across CME Group’s crypto products hit 106,000 contracts</li>
 <li>The average daily volume for ether futures was up 27% from the prior quarter</li>
 </ul>
 
</div>



CME Group’s crypto derivatives posted record open interest and higher than average daily volumes during the second quarter — even as the sell-off in digital assets markets intensified.  



Average daily open interest across its crypto products was 106,000 contracts, an all-time quarterly high, according to a report published by the derivatives exchange Wednesday. Average daily volume was about 57,000 contracts — the second-highest quarterly total.



Ether futures, in particular, notched an average daily volume in the second quarter of 6,600 contracts, an all-time high that was up 27% from the first quarter. A record 26,500 contracts traded June 15.



During the third week of June, the combined number of what the company calls large open interest holders for <a href="https://cms.blockworks.co/tag/CME-group/" target="_blank" rel="noreferrer noopener">CME Group</a>&#8216;s crypto futures reached a high of 404, signaling growing interest from institutional investors. 



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



Futures contracts are legal agreements to buy or sell a particular asset at a predetermined price at a specified time in the future. CME futures are dollar cash-settled and are based on a once-a-day reference rate of the underlying asset’s price.



CME began offering bitcoin futures contracts in 2017 and later added ether futures in February 2021. It <a href="https://cms.blockworks.co/cme-group-to-launch-cash-settled-micro-bitcoin-futures/" target="_blank" rel="noreferrer noopener">launched</a> cash-settled micro bitcoin futures contracts — worth one-tenth of one bitcoin — last year and <a href="https://cms.blockworks.co/cme-group-plots-launch-of-micro-ether-futures/" target="_blank" rel="noreferrer noopener">moved in November</a> to add micro ether futures, as liquidity in ether futures grew. 


<div class="wp-block-image">
<figure class="alignright size-medium"><img decoding="async" loading="lazy" width="300" height="222" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/06/McCourt-Tim-UPDATED-300x222.jpg" alt="Tim McCourt, CME Group" class="wp-image-4947" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/06/McCourt-Tim-UPDATED-300x222.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/McCourt-Tim-UPDATED-300x222.jpg?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/McCourt-Tim-UPDATED-300x222.jpg?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/McCourt-Tim-UPDATED-300x222.jpg?w=295 295w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/McCourt-Tim-UPDATED-300x222.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/McCourt-Tim-UPDATED-300x222.jpg?w=680 680w" sizes="(max-width: 300px) 100vw, 300px" /><figcaption>Tim McCourt, CME Group</figcaption></figure></div>


More recently in March, CME rolled out <a href="https://cms.blockworks.co/cme-group-to-roll-out-micro-bitcoin-ether-options/" target="_blank" rel="noreferrer noopener">options on micro bitcoin and ether futures</a>. Tim McCourt, CME’s global head of equity and foreign exchange products, at the time said the new offering would allow traders of all sizes to manage crypto market exposure with more precision.



The first bitcoin futures-based ETFs <a href="https://cms.blockworks.co/first-bitcoin-futures-etf-nears-1b-on-first-day-of-trading/" target="_blank" rel="noreferrer noopener">hit the market last October</a> after SEC Chair Gary Gensler had <a href="https://cms.blockworks.co/sec-chair-gensler-prioritizes-crypto-platform-crackdown/" target="_blank" rel="noreferrer noopener">hinted in August</a> that the agency would be more comfortable with products limited to CME-traded futures contracts. The SEC has not yet approved an ETF that invests in crypto directly.



Simeon Hyman, head of ProShares’ investment strategy group, <a href="https://cms.blockworks.co/proshares-exec-bitcoin-futures-etf-a-real-robust-and-first-class-solution/" target="_blank" rel="noreferrer noopener">told Blockworks</a> earlier this month that daily volume in the firm’s Bitcoin Strategy ETF (BITO) has eclipsed that of the Grayscale Bitcoin Trust (GBTC). He noted ​​a futures-based ETF is “not at all a second-class citizen” when considering challenges in the spot market.



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CME Notches Record Crypto Derivative Trades in Q2

Jocelyn Yang

<div id="highlights-block_62c7eb6bb4999" class="highlights">
 <ul>
 <li>FTX proposes to let individual investors post margins directly instead of going through a broker</li>
 <li>CFTC is currently considering FTX’s proposal and evaluating public comments</li>
 </ul>
 
</div>



Cryptocurrency exchange FTX is looking to get Commodity Futures Trading Commission (CFTC)’s approval to allow individual investors to use derivatives to place leveraged bets on bitcoin, the <a href="https://www.wsj.com/articles/ftx-presses-for-crypto-derivatives-approval-agitating-legacy-exchanges-11657084236" target="_blank" rel="noreferrer noopener">Wall Street Journal</a> first reported on Wednesday. 



The regulators are currently considering the proposal and could make a decision later this year. If approved, it would mean that investors could deal directly with the cryptocurrency exchange led by Sam Bankman-Fried rather than going through a broker, which could fundamentally change the way the derivatives markets infrastructure and operate.&nbsp;



FTX’s proposal has sparked opposition from competitors and Wall Street firms alike. Terrence Duffy, CEO of Chicago Mercantile Exchange (CME), said the move would create “market risk” during a US Congressional hearing in May. The CME offers a bitcoin derivative product that is designed to compete with FTX’s offerings.&nbsp;



In March, the CFTC opened up a <a href="https://www.cftc.gov/PressRoom/PressReleases/8499-22" target="_blank" rel="noreferrer noopener">public comment request</a> regarding FTX’s proposal for amended derivatives clearing organization registration, and received comments including concerns over customer protection. 



Dennis Kelleher, co-founder, president and CEO of non-profit organization Better Markets, <a href="https://comments.cftc.gov/PublicComments/ViewComment.aspx?id=69463&amp;SearchText=" target="_blank" rel="noreferrer noopener">wrote </a>in a letter that, during the evaluation, the CFTC must ensure “the protection of customers and market participants — and limiting if not reducing systemic risks — remain the paramount concerns.” 



<blockquote class="wp-block-quote">“We believe all investors should have the data, educational tools and a range of financial products available to them so they can make the best decisions possible for themselves,” an FTX spokesperson told Blockworks. </blockquote>



Chris Bae, CEO of digital asset trading firm Enhanced Digital Group, told Blockworks that it is “inevitable” that more sophisticated trading strategies emerge such as the use of derivatives as the crypto market gets more mature.



“We have seen institutional demand for structured products and derivatives being used to better navigate the current market cycle, so it is only natural the retail market will follow,” he said.&nbsp;



“Retail investors&#8217; assets deposited on these platforms should absolutely be senior to equity holders by new or old,” Bankman-Fried said in an interview event at Harvard Business School Club of New York last Thursday, referring to his company&#8217;s rescue move to crypto lenders <a href="https://cms.blockworks.co/ftx-reaches-deal-to-acquire-blockfi-for-up-to-240m/" target="_blank" rel="noreferrer noopener">BlockFi</a> and Voyager. 



Casey Wagner contributed reporting for this story.



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FTX Seeks CFTC Approval on Derivatives Proposal

<div id="highlights-block_61f1ab5410c1e" class="highlights">
 <ul>
 <li>FTX.US’s first external funding round — including participation from Paradigm, Temasek, NEA and Multicoin Capital— values the company at $8 billion</li>
 <li>Company could look to acquire companies as a way to access their users, gain licenses, president says</li>
 </ul>
 
</div>



Fresh off a hefty funding round, the US affiliate of crypto exchange FTX is looking to build its derivatives business as the company eyes acquisitions to bolster its user base.&nbsp;



FTX.US closed a $400 million Series A funding round Wednesday, valuing the company at about $8 billion.&nbsp;



Participants in the round include Paradigm, Temasek, NEA, Multicoin Capital, Tribe Capital, Ontario Teachers&#8217; Pension Plan Board, SoftBank Vision Fund 2, Greenoaks Capital, Steadview Capital and Lightspeed Venture Partners.



“There was such interest that we felt it was a good time to fully capitalize the entity and establish ourselves with the public-facing raise and valuation — and be able to acquire funds to take our business to the next level,” FTX.US President Brett Harrison told Blockworks.&nbsp;



FTX.US’s users increased from less than 10,000 at the beginning of 2021 to roughly 1.2 million at the end of the year, Harrison said.&nbsp;



Spot crypto traded on the exchange last year totaled $67 billion. Its total average daily volume grew 608% over the last 12 months as peak daily volume hit $812 million in November.&nbsp;



<h3>Making derivatives a priority&nbsp;</h3>



Crypto derivatives are essential to the exchange’s growth plans this year, Harrison said. The company in August <a href="https://cms.blockworks.co/ftx-us-brings-crypto-derivatives-to-users-with-ledgerx-acquisition/" target="_blank" rel="noreferrer noopener">acquired</a> digital currency futures and options exchange LedgerX, now known as FTX US Derivatives.&nbsp;&nbsp;&nbsp;



FTX.US has applied to the Commodity Futures Trading Commission (CFTC) to offer bitcoin and ether futures to retail and institutional customers.&nbsp;



Former CFTC commissioner Mark Wetjen <a href="https://cms.blockworks.co/ftx-us-hires-former-cftc-commissioner-to-lead-policy-and-regulatory-strategy/" target="_blank" rel="noreferrer noopener">joined the company</a> last year as head of policy and regulatory strategy. FTX.US also <a href="https://cms.blockworks.co/ftx-us-vying-for-margin-trades/" target="_blank" rel="noreferrer noopener">recently added a board of directors</a> — a prerequisite of the CFTC permitting the exchange to offer leveraged trading. 



The business is also trying to increase the reach of the NFT marketplace it <a href="https://www.prnewswire.com/news-releases/ftx-us-launches-ftx-nfts-301397216.html" target="_blank" rel="noreferrer noopener">launched in October</a>.&nbsp;



“There’s a lot of potential to be able to integrate with various blockchain gaming and other metaverse companies that are looking to use exchange technology as the backend of their platforms,” the FTX.US president said.



FTX.US could look to acquire companies to tap into their users, according to Harrison, who highlighted&nbsp; FTX’s buy of portfolio tracker Blockfolio. The business may also look to acquisitions to gain certain licenses.



“With FTX US Derivatives, it was a faster process to acquire a company with existing licenses then to be able to obtain them de novo,” he said. “There might be opportunities for acquiring companies with licenses that give us regulatory approval to offer different kinds of business lines.”



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FTX.US President: Crypto Derivatives are 2022 Priority

Michael Bodley

<div id="highlights-block_61e8662cfe433" class="highlights">
 <ul>
 <li>SOL futures are set to be just the third cryptocurrency supported by Deribit, reflecting the need for market-maker coverage and liquidity in derivative products</li>
 <li>The offering came after Deribit picked up interest in SOL from market-makers </li>
 </ul>
 
</div>



Cryptocurrency derivatives exchange Deribit is rolling out SOL derivatives — the latest indicator of strong <a href="https://cms.blockworks.co/galaxy-launches-new-institutional-solana-fund-to-track-bloomberg-index/" target="_blank" rel="noreferrer noopener">institutional investor interest</a> in the Solana protocol.



Two sources familiar with the matter said Deribit has been gauging the interest of options market-makers on Solana products for several months. The company confirmed to Blockworks that it’s internally testing SOL options, with a launch slated for later this quarter or early in the second quarter.



The Panama-based company currently offers options on exclusively bitcoin and ether. Luuk Strijers, Dereibit’s chief commercial officer, said the firm had considered adding other coins before but was concerned about liquidity and coverage by market-makers.



<blockquote class="wp-block-quote">“Of course, we’ve had interest in other coins before, but not sufficient enough to ensure coverage — except for SOL now,” Strijers said. “It was really obvious there is demand for SOL, and it wasn&#8217;t that obvious before.”</blockquote>



Deribit, which accepts only crypto deposits, is in the process of building a Solana wallet to facilitate those trades. Users will have to deposit SOL to trade SOL derivatives. The company plans to offer perpetual trading, options, futures and portfolio margining services.



Futures and options on SOL now trade over the counter and via a select number of smaller exchanges. Deribit’s offering ought to substantially expand their trading volume, sources said.&nbsp;



One crypto hedge fund manager gearing up to trade SOL for the first time said the derivatives offering is a welcome means to give institutional investors the ability to place directional bets on the cryptocurrency.



Deribit’s clients are split between about 80% institutions and 20% retail investors. The company earlier this month upgraded its platform to reduce latency by 25%.



Meanwhile, the derivatives specialist has been working on launching support for USDC. That would take the form of perpetual trades priced and margined in the popular stablecoin — including bitcoin to USDC and ether to USDC.



It would allow contracts to settle in USDC instead of a particular coin, giving the company the ability to offer additional coins in future without having to build a wallet for each asset.

Exclusive: Crypto Derivatives Exchange Deribit Planning Solana Futures

<div id="highlights-block_61e563bed7a56" class="highlights">
 <ul>
 <li>Uncorrelated Ventures now owns 12.5% stake in investment manager</li>
 <li>The Two Prime Digital Assets Fund returned 742.8%, net of fees, in the trailing 12 months</li>
 </ul>
 
</div>



Digital assets investment manager <a href="https://twoprime.io">Two Prime</a> has partnered with financial infrastructure venture fund <a href="https://uncorrelated.com">Uncorrelated Ventures</a> as it looks to quicken its growth and expand its network.



Uncorrelated Ventures, led by former Bain Capital Ventures managing director Salil Deshpande, now owns a 12.5% stake in Two Prime.



“We were in no need of funding, and so the interest in it is just to grow our network more quickly into the institutional realm,” Two Prime Managing Partner Alexander Blum told Blockworks. “[Deshpande’s] background at Bain Capital [Ventures] and a few other well-known funds prior to that will help us increase our reach and growth as we start our second year.”



<a href="https://www.baincapitalventures.com">Bain Capital Ventures</a> is the venture arm of Bain Capital, a private multi-asset alternative investment firm with roughly $155 billion in assets under management.&nbsp;



Deshpande worked at the venture firm from 2013 to 2020 — and was a general partner at Bay Partners for seven years prior to that — before starting Uncorrelated Ventures. In the last 15 years, he has invested more than $350 million into roughly 50 companies, including those focused on traditional and decentralized infrastructure.



<blockquote class="wp-block-quote">“Venture investors appropriately spend all their time seeking out alpha in their disciplines, but years ago I began feeling that even the beta of crypto might outperform the alpha of non-crypto, and that thesis has played out,” Deshpande said in a statement.</blockquote>



“Crypto beta-capture funds such as Two Prime’s have been valuable instruments in implementing these theses alongside crypto alpha.”



Blum co-founded Denver-based Two Prime in 2019 with Marc Fleury. Blum had previously founded digital investment group Atomic Capital, while Fleury had created open-source application server JBoss, which he sold to Red Hat — a company ultimately acquired by IBM — in 2006 for $350 million.



Two Prime Chief Investment Officer Nathan Cox was formerly the CIO for Prana Capital Group, where he developed and managed derivatives, futures and equity strategies for the firm’s volatility focused hedge fund.



The firm, registered with the Securities and Exchange Commission (SEC) as an investment advisor, has grown to more than $125 million in assets under management through its two funds and separately managed account offerings.&nbsp;



The Two Prime Digital Assets Fund, which launched in June 2020 and was opened to outside investors in February 2021, uses a derivatives-overlay on a net long bitcoin and ether portfolio to hedge out 50% of downside volatility. Net of fees, the fund has returned 742.8% in the trailing 12 months, compared to 466.1% for bitcoin over the same span, according to the firm.



The fund blends traditional statistical indicators with crypto-specific measures to fuel high risk-adjusted returns, <a href="https://cms.blockworks.co/qa-how-two-prime-has-outperformed-bitcoin/" target="_blank" rel="noreferrer noopener">Blum previously told Blockworks</a>.



Meanwhile, the Two Prime Liquid Yield Fund, which the firm launched on June 1, is generating about 17% annual percentage yield by utilizing vetted and code-audited DeFi stablecoin staking protocols, according to the firm.



Two Prime does not yet have plans to sell more of the company, Blum said. He noted that though the firm could look to add products over time, it’s currently focused on its existing offerings.



“Like everybody else, I’m interested in DeFi, altcoin fund or an NFT fund at some point in the future,” Blum said. “But we’re pretty focused on just growing our institutional investment base within these products.”



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Two Prime Teams With Bain Capital-backed Venture Fund

<div id="highlights-block_61ddffb312de4" class="highlights">
 <ul>
 <li>The startup just raised a seed round of €5 million, or $5.7 million, to expand its operations</li>
 <li>At launch, D2X plans to offer bitcoin and ethereum cash-settled derivatives that are denominated in euros</li>
 </ul>
 
</div>



An Amsterdam-based exchange is angling to become the first European Union-regulated entity offering institutional investors exposure to crypto derivatives.



D2X just raised $5.7 million in a seed round led by the blockchain-focused venture capital firm Tioga Capital Partners to support that effort. The company’s valuation was not disclosed.&nbsp;



The startup has applied for a license from the Dutch regulator AFM, CEO Théodore Rozencwajg told Blockworks.



The goal is for AFM to grant D2X a multilateral trading facility (MTF) license by the end of the third quarter, Rozencwajg said. Because European regulators have reciprocity agreements with each other, the exchange could then market throughout the EU.



<blockquote class="wp-block-quote">“We identified that there was huge demand in Europe, basically, for institutions wanting to get into the space and specifically in the derivatives segment, but adoption was still pretty slow,”&nbsp; Rozencwajg said.&nbsp;</blockquote>



Another investor joining the round, <a href="https://cms.blockworks.co/arbitrage-opportunities-in-digital-assets-flow-traders-edd-carlton/" target="_blank" rel="noreferrer noopener">Flow Traders</a>, is a leading crypto market-maker. The idea is to tap the firm for additional liquidity after D2X launches, Rozencwajg said.



At launch, which could come as soon as September, D2X plans to offer options and futures built on Bitcoin and Ethereum. The exchange won’t offer spot trading, focusing exclusively on cash-settled derivatives denominated in euros.&nbsp;



Other exchanges have previously received MFT approvals from the United Kingdom, but Brexit has prevented them from being used for passport purposes.&nbsp;



Rozencwajg came up with the idea for D2X while working with co-founder and chief technology officer Don van der Krogt at Netherlands market-maker All Options. The pair explored the possibility of starting an in-house crypto trading desk — which was too complex from a regulatory standpoint — before starting up D2X in late 2020.



<div class="wp-block-image"><figure class="alignright size-full"><img decoding="async" loading="lazy" width="352" height="237" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/D2X.jpg" alt="D2X Team" class="wp-image-13818" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/D2X.jpg?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/D2X.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/D2X.jpg?w=325 325w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/D2X.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/D2X.jpg?w=50 50w" sizes="(max-width: 352px) 100vw, 352px" /><figcaption>D2X: Theodore Rozencwajg, CEO (center), Don van der Krogt, CTO (right) and Laetitia Grimaud, general counsel (Left)</figcaption></figure></div>



The company raised a pre-seed round to kickstart operations and now has 13 employees, which Rozencwajg expects to grow to 30 by September 2022. The latest capital infusion will be deployed in three main areas: risk management, technology and regulation.



In addition to the Brussels-based Tioga Capital and Flow Traders, Darley Technologies, Fortino Capital, Picus Capital, Kima Ventures, and Philippe Jabre’s family office also participated in the round.



Laetitia Grimaud co-founded D2X with Rozencwajg and van der Krogt. Frederic Colette, formerly the head of Societe General’s prime brokerage, holds the title of chief operating officer.&nbsp; Ernest van der Hout, previously the head of risk for clearinghouse LCH.Clearnet, is the exchange’s head of risk.



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<hr class="wp-block-separator">

Startup Exchange Aims to Offer First EU Crypto Derivatives for Institutions

Liz Coyne

In this video, Blockworks’ “Forward Guidance” podcast host Jack Farley sat down with Phillip Gillespie, Co-CEO of B2C2, at Blockworks&#8217; <a href="https://cms.blockworks.co/events/das-london/" target="_blank" rel="noreferrer noopener">Digital Asset Summit in London</a> to talk about the rise of over-the-counter (OTC) trading in the digital asset sector. 



<meta charset="utf-8">Gillespie joined B2C2 in 2018 to lead the firm’s expansion in Asia, successfully securing B2C2’s position as the number one foreign crypto liquidity provider in Japan. In 2020, B2C2 was acquired by the Japanese financial group SBI.



Previously, <meta charset="utf-8">Gillespie worked at Goldman Sachs where he oversaw the FX G10 business and commodities trading for EMEA, as part of the systematic market-making team. Prior to that, he was an FX voice and systematic trader at Barclays and JPMorgan.



<meta charset="utf-8">Gillespie holds a BSc in Industrial and System Engineering from the Georgia Institute of Technology and an MSc in Financial Engineering from the Haas School of Business at the University of California, Berkeley.



Watch the full interview below.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="The Rise of OTC Trading in the Crypto Sector | Phillip Gillespie, B2C2" width="1024" height="576" src="https://www.youtube.com/embed/auU6ca5ZFq4?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<hr class="wp-block-separator"/>



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<hr class="wp-block-separator"/>

B2C2: The Rise of OTC Trading in the Crypto Sector

In this video, Blockworks’ “Forward Guidance” podcast host Jack Farley sat down with Omid Zadeh, head of business development, EMEA, at Matrixport, at Blockworks&#8217; <a href="https://cms.blockworks.co/events/das-london/" target="_blank" rel="noreferrer noopener">Digital Asset Summit in London</a> to talk about the increasing demand for borrowing and lending in digital assets, and the evolving spot and derivatives markets.



<meta charset="utf-8">Zadeh leads business development for Matrixport across Europe. He was previously sales director at the London Stock Exchange Group within the capital markets trading division covering hedge funds and proprietary trading houses. Prior to that, he was vice president within ICAP&#8217;s electronic broking division, covering banks and the buy-side.



Zadeh holds a BSc in Economics and Finance from the University of London and an MBA from Cass Business School.



Watch the full interview below.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="The Evolution of the Spot and Derivatives Markets | Omid Zadeh, Matrixport" width="1024" height="576" src="https://www.youtube.com/embed/sh6bt0W1s10?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<hr class="wp-block-separator"/>



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<hr class="wp-block-separator"/>

Matrixport: the Evolution of the Spot and Derivatives Markets

Sam Martin

<div id="highlights-block_617725d07bf3f" class="highlights">
 <ul>
 <li>Altcoins are getting hit hard as BTC and ETH fail to garner positive momentum</li>
 <li>The reduction in derivates open interest for BTC can be viewed as a silver lining</li>
 </ul>
 
</div>



BTC and ETH struggles fuel large altcoin sell-off.



BTC market structure looks healthier than the May 2021 correction.



Futures open interest and perpetual funding rates for BTC have retraced to healthier levels. 



ETH has lost key areas of support but may prove to outperform in the next bear market by being a more productive asset than BTC, according to some industry experts.



NFT floor prices have risen over the last 24 hours, but this is likely due to the price correction in the assets they are denominated in, i.e. ETH and SOL.



<h3>Latest in Macro:</h3>



<ul><li>S&amp;P 500: 4,668, -0.91%</li><li>NASDAQ: 15,413, -1.39%</li><li>Gold: $1,786, +0.19%</li><li>WTI Crude Oil: $71.24, -0.60%</li><li>10-Year Treasury: 1.414%, -0.075%</li></ul>



<h3>Latest in Crypto:</h3>



<ul><li>BTC: $46,527, -7.41%</li><li>ETH: $3,735, -10.01%</li><li>ETH/BTC: 0.0803, -2.61%</li><li>BTC.D: 42.00%, +1.08%</li></ul>



<h3>Altcoins getting hammered</h3>



Altcoins are treading water on the heels of weakness in BTC and ETH price action. Market sentiment is poor according to <a href="https://alternative.me/crypto/fear-and-greed-index/" target="_blank" rel="noreferrer noopener">alternative.me</a>, with the crypto fear and greed index sitting at 28. The benchmark is on a 100-point scale where 0 indicates fear and 100 indicates greed. 



BTC is seen as one of today&#8217;s &#8216;top gainers&#8217; according to data from <a href="https://app.laevitas.ch/dashboard/derivs/topGL/movers/gainers" target="_blank" rel="noreferrer noopener">laevitas.ch</a>, despite being down roughly 7.5% over the past 24 hours. BTC dominance, or the percent of the total crypto market cap that BTC comprises, is up approximately 1.10% according to data from <a href="https://www.tradingview.com/symbols/CRYPTOCAP-BTC.D/" target="_blank" rel="noreferrer noopener">TradingView</a>.



The top 25 losers over the past 24 hours can be found in the table below provided by laevitas, showing that altcoins are taking the recent dip especially hard. Some coins have seen their market caps drop by nearly 25%. 



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="434" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png" alt="" class="wp-image-12517" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=1237 1237w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Laevitas.ch</figcaption></figure>



<h3>BTC today vs. May 2021</h3>



After trading north of $50,000 last night, BTC has since corrected and briefly traded below $46,000 according to data from <a href="https://coinmarketcap.com/currencies/bitcoin/" target="_blank" rel="noreferrer noopener">coinmarketcap</a>. 



This correction shows different patterns in BTC exchange flows when compared to the correction in May of 2021, according to a <a href="https://insights.glassnode.com/the-week-onchain-week-50-2021/" target="_blank" rel="noreferrer noopener">Glassnode report</a>. Between May and July roughly 168,000 BTC were moved onto exchanges signaling long-term holder selling. The correction is seen from the end of October through today, more than 45,000 BTC has moved off of centralized exchanges signaling investor accumulation.



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="585" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png" alt="" class="wp-image-12520" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=457 457w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=383 383w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=1185 1185w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure></div>



Net Unrealized Profit/Loss (NUPL) provides a gauge for how much of the BTC supply is being held in unrealized profit or loss. 50% has historically been a battleground for the bulls versus the bears. 



&#8220;Per this chart, the current leg down in price seems to resemble a correction within a larger bull trend &#8211; a stark contrast to May where NUPL sliced cleanly through the 50% level,&#8221; states the aforementioned Glassnode report. &#8220;It is possible that this trading range is defining the bull-bear line in the sand, and a key risk is whether a possible transition into less favorable conditions occurs should it fail to hold.&#8221;



The BTC NUPL was unable to hold the line during May, which led to further downside. It remains to be seen whether the bulls can hold the line this time around. 



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="575" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png" alt="" class="wp-image-12522" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=465 465w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=1172 1172w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure></div>



<h3>BTC derivatives</h3>



The current BTC market structure and <a href="https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm" target="_blank" rel="noreferrer noopener">tomorrow&#8217;s FOMC meeting</a> make for a shaky outlook for price action, but one silver lining is the reduction in open interest in the derivatives market. 



A high amount of futures open interest increases the possibility of a large move where traders have their short or long positions wiped out. &#8220;This influence of futures markets on price is particularly dominant during periods where Futures Open Interest climbs above the 380k BTC level,&#8221; states the <a href="https://insights.glassnode.com/the-week-onchain-week-50-2021/" target="_blank" rel="noreferrer noopener">Glassnode report</a>.



Futures open interest has declined to healthy levels and has yet to spike back up as seen in May of 2021 before the correction below $30,000. Data from <a href="https://app.laevitas.ch/dashboard" target="_blank" rel="noreferrer noopener">laevitas.ch</a> shows perpetual funding rates are only slightly positive, which reaffirms the notion that there is less aggressive dip buying in the BTC derivates market.



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="575" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png" alt="" class="wp-image-12524" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=465 465w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=1172 1172w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Blockware Intelligence</figcaption></figure></div>



Another note in relation to perpetuals includes the decline in open interest compared to the BTC market cap. When this ratio is declining, the market is more heavily spot-driven and less dictated by the derivatives market, according to <a href="https://insights.glassnode.com/the-week-onchain-week-50-2021/" target="_blank" rel="noreferrer noopener">Glassnode</a>. 



The recent correction saw a healthy leverage washout, but not as drastic as the one seen in May of 2021. This tells investors that while a lot of leverage has been wiped out and the market is being more heavily influenced by spot demand, a grind lower could still lead to more liquidations and a volatile movement to the downside.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="571" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png" alt="" class="wp-image-12529" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=468 468w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=1172 1172w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure>



<h3>Ethereum note</h3>



ETH has been making lower highs and lower lows in recent weeks, which is seen as a bearish market structure. It has also lost the previous closing high seen in May of 2021, which reaffirms the bear case.



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="640" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg" alt="" class="wp-image-12532" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=411 411w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=418 418w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=350 350w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=1440 1440w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: @Pentosh1</figcaption></figure></div>



On a positive note, some prominent investors in the space believe that the next crypto bear market will be more kind to productive assets or assets that provide a yield, such as ETH, and be harsher on non-productive assets such as BTC.



&#8220;A small percentage of capital in the world is non-productive. Fiat cash is ~$100T and Gold is ~$10T. Public and private equity, debt, and real estate are at least 100x larger,&#8221; <a href="https://twitter.com/KyleSamani/status/1470144093439336451?s=20" target="_blank" rel="noreferrer noopener">wrote</a> Kyle Samani, co-founder of Multicoin Capital. &#8220;The world actually does not care about non-productive assets. This is why I expect SOL and ETH to substantially outperform BTC through the next &#8216;bear market&#8217;. The tech money doesn’t care about macro. They just want to be long the stuff that they think is going to change the world&#8221;.



<h3>Non-Fungible Tokens (NFTs)</h3>



Trading data from <a href="https://opensea.io/rankings" target="_blank" rel="noreferrer noopener">OpenSea</a> and <a href="https://solanalysis.com" target="_blank" rel="noreferrer noopener">Solanalysis</a> of some of the top Solana and Ethereum projects can be found below:



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="328" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png" alt="" class="wp-image-12533" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=1226 1226w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Ethereum Projects</figcaption></figure></div>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="285" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png" alt="" class="wp-image-12534" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=1197 1197w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Solana Projects </figcaption></figure></div>



If you made it this far, thanks for reading! I am looking forward to catching up tomorrow.



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Altcoins Tread Water as BTC and ETH Fail to Catch a Bid: Markets Wrap

Sam Reynolds

<div id="highlights-block_61a62d90ce079" class="highlights">
 <ul>
 <li>Hxro’s protocol allows market makers, traders, and other network participants to access what it calls “globally aggregated liquidity”</li>
 <li>$34 million strategic round follows $15 million HXRO token deal from earlier this year which had the backing of fund managers Alan Howard and Louis Bacon</li>
 </ul>
 
</div>



Hxro, a derivatives primitive built on the Solana blockchain, announced today that it had closed a $34 million strategic round led by Jump Crypto, Blockchain Capital and SIG DT Investments.



Financial primitives refers to protocols that allow for the use of liquidity, leverage, risk, and arbitrage in the broader crypto ecosystem. For DeFi protocols to function properly, they need to incorporate these four primitives in some way, which has led to interest from investors in maturing this underlying infrastructure.



Earlier this year <a href="https://cms.blockworks.co/pantera-capital-leads-15m-fundraise-in-dex-protocol-0x/" target="_blank" rel="noreferrer noopener">liquidity primitive 0x protocol raised $15 million</a> in a round led by Pantera Capital while <a href="https://finance.yahoo.com/news/defi-protocol-element-finance-raises-181119256.html" target="_blank" rel="noreferrer noopener">fixed rate protocol Element Finance</a> closed a $32 million round in October.&nbsp;



“Investors are beginning to understand the impact open source financial primitives [the software building blocks of DeFi] can have on the financial market,” Clay Robbins, head of growth at 0x, told Blockworks in an earlier interview.&nbsp;



In a release, Hxro explained that its protocol allows for market makers, traders, and other network participants to access “globally aggregated liquidity” while combining the risk, margining, clearing, and capital efficiencies of centralized derivatives on Solana.&nbsp;



“The notional size of incumbent derivatives markets is still many times that of what is available in DeFi. The mission of Hxro Network is to change that in a way where all market participants, no matter the size of their contribution and participation, can benefit,” Dan Gunsberg, Co-Founder of Hxro Network, said in a release.



<blockquote class="wp-block-quote">“As a community, we are creating a very powerful foundation for decentralized derivatives to scale and become a significant part of the fabric of the global derivatives landscape.”</blockquote>



In a release, Hxro said it will utilize a unique staking protocol to facilitate network governance, liquidity incentives, and rewards. The network’s value will largely derive from transaction fees generated within the network



Hxro said that it plans on launching its v1 network on the Solana mainnet in December, with more development work occurring during the first quarter of next year.



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