The Role of Crypto Derivatives in Bringing Another Billion Users to the Market

Transcript

we're going to talk derivatives and crypto derivatives of course in particular and interestingly enough what they may do to bring another billion users into the market I'm interested to hear how that's going to happen and how derivatives in particular will actually accomplish that our panelist today will be moderated by Aaliyah dupta from Signum bank and I'll let her introduce all of the fine panelists coming up Aaliyah over to you thank welcome hi my wonderful panelists please I would say if you line up with your head shot missing a chat oh sorry good point thank you

yes thank you so much all right good morning everyone um I know that Jordi Bina is speaking next door right now so thank you all very much for being here with us talk about crypto derivatives um it's really good to be with this specific group of experts on this topic because I don't think in the crypto Market there's anyone else better place to tell you what's going on with derivatives and also what to be looking out for in the months ahead but before we dive in quick round of introductions I will start I'm Alia dupta from Signum bank and let's go down the line yeah hi everyone uh my name is hendrik uh Andre K I'm the founder of THX which is new

crypto options and Futures exchange uh hi P sh CME Group uh firstly thank you for having me on the panel uh EXC incredibly excited um for for sharing our thoughts um I lead equity and crypto product development at CME Group um and what that means is um leading the development of derivatives so for crypto especially uh Bitcoin and ether Futures and options yeah good morning my name is Martin lber I'm a digital asset strategist at Market wector indexes uh we are doing digital asset index indexes since 2017 so uh you know I can't crypto years at Doc years so we do that for 49 years

now successfully and yeah happy to be here perfect and um hi my name is Shantel Bradford um I work at darab we are a crypto derives exchange um probably the one of the biggest but inp to be number one options we've got an 80% market share of the total open interest across BTC and eth um and I run the AA institutional business fantastic all right so many different topics I want to dive in specifically for each one of you but maybe just to kind of set the tone right what is the current state of crypto derivatives what what sort of Trends have you seen emerge in the last couple of years and where are we today and maybe I checkl to chant start um well I think definitely a lot

has changed in the last couple of years especially um obviously I think so I I joined two and a half years ago and and back then it was very much a question of sort of us onboarding clients um I think in the last couple of years particularly since FTX has become a much more of a sort of teaway thing people are expecting a lot more um so last year was very much a building year um we did multiple custody Integrations so daret was actually one of the first exchanges to um integrate with custodians we integrated with copper and Cobo nobody used used them after FDX all the other exchanges that are integrating um and we've done Fidelity fire blocks uh coin base in the last year and we're about to do zodia um we also got a license so we got our VAR

license in March this year so we've got regulated and that license is expected to be operational in the second half so probably the third third quarter this year um and yeah I think just just transparency audited financials um custody integration licenses and being more transparent and and you know growing up and trying to move towards sort of you know more of a trustworthy um open business so regulation or more regulation greater regulation is the trend that you're sort of seeing in this space um Henrik yeah I think um directionally indeed the market is going towards more um regulation and better infrastructure but um the flows have not yet uh reflected that so I think um if

you look at um crypto derivatives volumes today is still really dominated by perpetuals um and so all the the dated contracts Futures and options um they are really under um under penetrated I would say in the exchanges that focus more towards retail um it's more um um something that you see in in a couple of um regulated exchanges like CME but um but really the the biggest use case today remains um sort of the the Perpetual market and um um there is let's say a lot of um adoption there from institutions that that do Market making strategies so very high volume relative to your Capital requirement or

your open interest um but there is really not a lot um you see of like institutional positional Traders um very often they are still not yet there in terms of being comfortable with um with with basically the non-market risks associated with a lot of exchanges and so the trend is that we we will definitely see that adoption but it's it's currently today it's not yet there um yes so what we're seeing is a a real move to um regulated markets and regulated venues and and kind of as Shantel said the Market's maturing right so we're seeing clients that want to offer crypto to their clients but in a

very thoughtful way so to try and remove some of those risks that we've we've uh we've seen over the years um and because of that the futures that we that we offer um obviously cash settled fully regulated um centrally cleared um we've seen a huge increase um in demand for for those um regulated Futures so we're now 30% of the overall um Futures market so we comeand 30% share um and actually you know in terms of that that trend of course the the market started very much spot into perpetuals we're now seeing for Bitcoin um a growth in calendar f futures um so the the volume between pups and calendar futures for Bitcoin is

now really equaling out still work to do on on The Ether side um but really shows that that maturation in the markets um the other thing you know in terms of of Trends um that we're seeing is this flight to Quality so we've had so much turbulence over the past couple of years right FTX svb you know the list you could spend the next 40 minutes talking about all of the the market uh turbulence um but that because of that I feel that people are coming to regulated venues because of that trust aspect right they know what they're getting um so on a daily basis we're doing um five billion notional uh overall crypto Suite um and that translates to about 15,000

Bitcoin Futures contracts and really what that liquidity brings for for our clients is is three things right and and those three things will benefit the ecosystem so it's price transparency it's um price Discovery and Tighter pricing so all of that you know really pushing forward the market well and Martin yeah it's it's funny that we uh speak of calendar Futures right in crypto they should be Futures and yeah in tradire it's just Futures right so a future with a certain expiry date but as the Perpetual swaps are so popular uh we say calendar Futures and I have to agree um from the indexing side when we get requests for an index it's mainly for

these more regulated calendar Futures the likes of the c or urex in Germany for example uh we do that and that's public information also for coinbase futures um people might think it's a little bit boring also from the underlying perspective but that's also has to do with regulation yeah so we have Bitcoin in ethereum uh and now we' have done for example all the Bitcoin Forks yeah because that's likely also commodity yeah so you have Bitcoin cash Litecoin nobody uses that yeah to be honest but that's the next route in Doge yeah finally a mcoin so I My Hope Is that we see more interesting underlying indexes for futures for the protocols which are really used

yeah I I love that you explained calendar Futures because when P mentioned it I was like huh I think I know what she's talking about but it's good that you clarify nor Futures with a new name yes exactly we call them data Futures no really no but the thing is like the whole derivative Market tends to be quite a small Niche within the broader crypto industry right and when we want to see more adoption when we want to see more people entering the space I mean this panel is called bringing the next billion users in how do you see derivatives playing a role in bringing these people in and also keeping them here let's say uh P great question um I think it's about choice and it's having

the right right tools to match with that client choice and what I mean by that is um dependent on their risk profile dependent on their time for a trade or you know the the the time Horizon that they're looking having different tools and access points to match up with that so for a very long time we only had spot and perks which was great for the retail audience right it wasn't necessarily good for um an inv Institutional Investor now we've got this huge array of derivative contracts the ETF markets um just make that investment Choice a lot easier right you can have your your stocks uh ETF and side by side have a

crypto so I think that is what will bring um the next billion having that choice but also marrying up that risk parameter in what the client is comfortable with trading versus where they can access right so you know um you can access spot but you might not want to you might not have the capability of H being fully funded um and so it might be a capital constraint and therefore you might go to the derivative space if you want ease of access you may go to the ETF route so having that choice I think is is key um in terms of the the ETF I think it's um a phenomenal thing for for the industry and it really helps have all of these different aspects

right so the ability to for for for Traders to trade um you know futures or even CME Futures and options versus derit versus you know the ETFs having that um AR opportunity having the basis trade really creates efficiencies in in the marketplace um and you know for us the ETF thing didn't happen by chance right we we uh the cmecf reference rate is used for six out of the 11 um spot Bitcoin ETFs um and it's because of the futures that you know we we B to Market back in 2017 we were building that market for the last six seven years enable for for ETFs to finally come aboard come come about so

um a lot of kind of behind the scenes work but I think now to take it to the next level you know in terms of your your question how do you get it to the next billion um it's education and I think the ETFs play a huge part of that because they have that distribution Network they have the I um Ras they have the financial advisors they can actually simplify and take that message out and have more people come in into the space um so yeah really excited um and I think you know from from the from future side we've seen a huge increase in demand for futures as the ETFs are growing so there's a need for still risk management

and we're seeing some of that activity come back to Futures nice would anyone like to I think it's maybe less about the next 1 billion users but maybe also bringing the large institutions in and I think for them it's really important that they have the same look and feel in terms of yeah Futures what they know from from stock futures or Bond futures for example yeah so I know a lot of people have a problem having cash settled things but those institutions love to have cash settled Futures uh they love to have it uh uh indexed yeah against a benchmark to have a settlement price a reliable settlement price there so uh and also maybe we can also talk about

that I think per purchase swaps I I love them I like them but they come also with some costs right um uh the funding rate can be huge yeah so over longer term it can be quite expensive to hold them and so also the risk of Auto Liquidation yeah that's that's less of a problem for the more uh traditional Futures so I think uh yeah we also need to bring the larger institutions in that's important yeah I I think also I mean again like I said earlier like the infrastructure there's still you know lack of prime Breakers in the space lack of capital efficiency um at the moment you know there's so many different exchanges and there will be consolidation in the market you know people don't want to like big institutions do not want to on board to

20 different exchanges it's a nightmare and also like you know the exchanges in terms of like onboarding people it's it's it's just it's just not going to work like that um so you can on board with a prime broker you get the capital efficiencies and then you just on board with one person and actually maybe somebody would not want to face thereit directly um but you know they could easily face sort of a regulated Prime broker and and that's how they get around it I think to P's Point earlier about you know I think a lot of people in traditional markets like people enter with spot so you know people start trading spot I think the ETFs have also you know you know give accessibility for a wide range of people but then the next stage is you know hedging essentially people need to hedge and I think again

the educ you know you can do so much with options and you know you can speculate you can um hedge you can trade directionally like there's so many different ways of trading them and I think there's just a bit of a lack of education and maybe Henrik said that the big institutions aren't there yet and and I do agree but I guess you know compared to last year like I think most exchanges last year didn't apart CM did well but more of the crypto natives did not have a great year like darab you know we we were going we weren't going like that but we were kind of going like that because the number of contracts trading and options like bigger institutions are coming into the space we work with a company called Paradigm who do our block trade so that's basically if you want to trade in size

without moving the market when I joined two and a half years ago about 10% of the trades went through Paradigm and now about sort of 30 35% of block trades so that just does show that you know that really has like big institutions are coming more traditional people are coming in and I think with the licenses with the prime Brokers with like sock 2 like everything that the kind of bigger institutions want with you know obviously it's a slow process but we're getting there we're going to apply for a mifford Braker license and I think that's what and and competition I mean I think people don't want to just face One exchange like having 80% market share like it's it's it's a counterparty risk right so people like THX maybe it's Alex maybe it's CME maybe it's one of the newer exchanges but you know one of them

will come and you know we don't maybe we don't have the 80% market share we have 50% hopefully we have still have the majority but it um it you know the Market's bigger and we're all kind of doing well and and the overall industry is growing and that's how I see it the rising side lifting all the boats yeah exactly I mean just to add to that sorry that I don't it's not necessarily like in competition with each other I think it's all you know all of our Collective aims is to grow the market and to grow that ecosystem so yeah like I mean when you guys you know we want CME to do well because then everyone Hedges on derit so we do well so it's it's brilliant if CME gets more customers and also you Reach people we can't touch the US that you

reach people that we can't reach like it it's it's it's brilliant and I think still like if you look at our top 20 like our futures and perps like um top 20 are very similar I would say to the CME but in terms of options like the the top 20 are very very very different and that's because those big you know Futures traders who they're not they're bread and butter is options but they haven't got to that stage yet because the Market's not big enough as as Hendrick was saying earlier but I would just also like to add on on um going back again between the the Perpetual the contrast between the Perpetual volumes and the the more classical traditional Finance instruments like Futures and options um so I think I think really overall der this Market has really grown by going

vertical in that Perpetual use case and starting to see the institutions adopt Futures and options but I think um the the real way to unlock that more horizontal growth is um is just realize the natural position in crypto is just to be long spot right and it's a chart goes up and to the right but it's a very volatile chart and so the key challenge that a retail or an Institutional Investor has who wants to hold uh Bitcoin ethereum or other cryptos for a long time is volatility drag and this is a this is across all asset class it's just a mathematical phenomenon of if you have for instance something that has an expected return of let's say 20% your volatility 60% your compounded growth really gets shrunk to only like 2 3%

because of Varian drag and um the way you can actually manage that is is either you're position sizing you're rebalancing or you're using the strategy that for instance Pension funds use at a very large scale in equities which is to uh buy puts and you fund them by selling calls and so I think there's an incredible unlock of of of um just the the the whole spot market right there's there's an incredible unlock of of of open interest and volume in in Futures and options that could come from just people doing these simple overriding strategies and I think we should just make it easier for people to do it it's for institutions take away some of the concerns associate with these trait like of exchange settlement and for retail it's it's I think part partly it's education partly it's just like making

good rappers around it if you look at Athena and they built three billion uh uh open interest or dvl in in in a matter of months it shows you just how much untapped amount there is for these these passive yield strategies using derivatives next to the active trading that people already do inals yeah I love that you talked about atha and that that is kind of growing on one side where you also have the crypto indexes now gaining traction on this side so it's kind of the whole spread of the market and in terms of market demand as well but coming back to specifically the indexes right and how popular they've become or how what a big role they now play in bringing people into the crypto space how do you think that this will now Drive the derivative product Innovation

like Henri touched on this a little bit but maybe Martin you can shed some light as well well yeah you know um standardization is super important in finance and a benchmark or an index brings standardization a good example is um pricing so what is the Bitcoin price yeah if you ask an us guy it's a coinbase price if you ask an Asian guy it's binance or maybe it's a third exchange you have hundreds of exchanges you have centralized exchanges you have decentralized exchanges so um what we do or what most of the indexes do is that you uh build the composite price yeah mostly a volume weighted and a Time weighted average price which is very robust and you can settle against so that's one thing the other thing is you

still have a lot of glitches right um for I mean we saw that with NY I would love to buy Berkshire heatherway 9% down but um you very frequently have that in the crypto World also for the larger exchanges yeah and so um it's really important to to um have an eye on your pricing source and and and build an aggregate price so that's that's super important and maybe deret also has an approach to doing this or no I think I think you know obviously more index companies coming in I think bit more consolidation unfortunately yes no but I think you know again it's it's it's having like an independent you

know third party um index provider you know it makes sense it again brings more credibility to the market and it makes people trust that I think we'll see less of people having their own indexes and more of sort of people using the independent sort of third party pricing yeah me these are all just signs of the market maturing as well right um but we're looking at new types of derivative products in terms of um and hendrik you talked about this a little bit as well but uh kind of moving past there's one side of the market which is more speculative and using derivatives to get more um leverage but on the other hand you also have the possibility to hedge and use that to kind of protect your position in the

market what other kinds of products do you think we now see will we will see emerging for this broader new uh Market of entrance um Henrik yeah I think um the first thing really that needs to happen before um real Innovation can can take off is just that these these outright markets uh uh in Futures and options gain some maturity right it's just structurally um there's there there's things that options can do that uh linear contracts perpetuals and Futures cannot um and especially becomes interesting when you have combinations of options because you can express um a view on on the full distribution of an asset um and then there's a lot of product Innovation that

can can come on top as derivatives of those base derivatives of those Base building blocks like for instance uh default like volatility index which I think default is a great product but it's just it's not getting a lot of traction and I think it's it's just a question of these these these these building blocks uh first uh gaining gaining more maturity um so I think I think um so before we start seeing more complex use cases I think the the simple use cases need to grow um so I think basically what exchange you should focus on is just uh removing friction for those simpler trades um you know if if um if you see that basis trades at at uh easily can trade at 50 to 100% analized yields then you know one of the first

things you just need to encourage is better for instance Arbitrage between perpetuals and Futures with simple uh future spread products Etc um just to allow like basically the the the Arbitrage or the the straightening out of the prices between these base derivatives and then uh once that's there and you have more uh more open Interest next to volume then I think uh you unlock uh innovation in general um yeah I couldn't agree more I think that there's so much still to be done within Bitcoin and e um we're trying to bring um the some of the trading mechanisms that we see across all of our different asset classes uh into crypto so um BK uh basis Trader Index close is a very popular functionality that gives um certainty at

the close so uh traditionally used in equity markets you might want to snap the S&P price at the end of day on the index level and then replicate that into a Futures trade um so with a BK functionality you literally do um uh put on a trade so your BK might be the reference rate plus one two um and that con converts into the futures um so BK is a a really nice product to to give that certainty we're also seeing um use cases for uh exchange for trade um exchange for physical so efrp um especially with the the ETFs so where you can have a spot position and

then um off lay that with a Corr bonding Futures position so yeah you know a lot to do um still within the space uh you know in even in terms of of indices building out that um that side of the business so um you know we obviously have the Bitcoin and ether reference rates um we also have um individual coin um reference rates on another 20 um 20 tokens um but I think that there's more to do in terms of like portfolio volatility um you know staking there there's a lot to be built still within Bitcoin and ether before we we move out to to that b landscape I

think yeah I also like to see more baskets yeah the S&P 500 in crypto for example um that would be nice um at the moment I mean it's enough to hatch your portfolio with Bitcoin right but but over time think of it I think Bitcoin dominance will fall over time also the correlations between the coins should fall because of course what has Bitcoin to do with BNB token or a gaming token nothing yeah but at the moment everything is super highly correlated yeah small niche of players play the same thing but um it doesn't have to be super complicated because the market is super concentrated so a top 10 index for example covers 75% of the total crypto

market cap yeah I know it's a regulatory hurdle still but maybe we we finally get there next year is maybe the year of the crypto ETFs and and maybe we can do also a basket solution or sectors and it's super interesting um yeah and I think Noah mentioned structure products I think that's obviously the the big thing that that the industry is moving towards so some of our sort of bigger Asian Crypton native clients are offering um Structured Products to their clients then nutritional Finance are starting to offer products to their clients like a small crypto allocation um because of you know us getting our stock to are license and everything they can now face us us and they need options in those

products so I think we'll see a big growth from that too um and I think that's still very very small at the moment um we recently launched linear options in March um so linear altcoin options like again very different ways of saying things um but um altcoin options so essentially they're usdc settled so we launched um salana xrp and Matic smaller coins um encouraging retell to in you know trading different events um and it's still very small um but it's growing at sort of 40% every month and I think that you know I think we're going to touch on sort of access accessing retail um a bit later but it does bring retail to the market having these smaller coins um and then the lot

I mean ETF obviously we've already spoken about that you know that brings new people to the market and eventually um you know they that there'll be options on the ETF and I'll see that again people ask me you know how do you think that affects Arab but again I see it as growing the market I think you know options on the ETF is great it will grow the market and it will bring more people and we'll see benefit from that you guys will see benefit from that um and then finally is um you know I think at the moment having to prefunds and not having any um you know any yield on sort of having it's so Capital inefficient and you know now people are working on sort of tokenized money market funds so we can accept sort of you know Black Rock Franklin Templeton hash no um we're looking at

accepting stable coins as collateral um State eth um we're going to add Lio as so we've we've just um just about to Launch Cross collateral so we'll accept Lio as a coin um for state eth and then you know expect to add you know we're not going to we're not going to allow every single one there are so many out there and so many people are trying to sell to me at the moment um but I can see us having sort of 10 20 coins and similarly for linear I think you know we're never going to be one we're very institutional so we're 80% institutional 20% retail so we're never going to have have hundreds of coins like some of the other exchanges but I see you know 10 20 if there's a client demand you know we'll we'll launch it and you know see

further growth from that I mean you you're speaking also about you know the institutional side versus the retail side and the kind of the the demands on either side of the spectrum are slightly different um maybe uh Henrik you could talk about what sort of products are targeting on each are targeting each sort of group yeah I I think the the dominant use cases um is is is if you simplify it's just retail doing the equivalent of what they would do in in Robin Hood with equities is they they basically trade um perpetuals um as if they're like zero DTE options because what they do is they um yeah they they basically put a stop

loss or a liquidation engine puts it for them within let's say an average daily move so basically you either quickly take profit or that thing uh stops you out within a day and so you see the the volume to open interest metrics being being very elevated for perpetuals on an average day on bance or buits it's 1 to two uh it can easily be 5 to six um in uh in volatile markets um and so I I yeah I'm going to repeat a little bit what I said before but I think um yeah crypto's just been very good at that like High Velocity type of trade and now we just need to bring them into the the lower velocity type of Trades the that are um that are more focused on on on yield um and I think you just have to

make it yeah simpler to do these these basic trades um I think um and you're talking about retail in the space yeah and I I think I think that's the way to to get retail out of this very high velocity use case um and and and I think the exchange should offer um basically for instance the ability to um to have staked assets as collateral to do for instance covered call selling um so that they can structure their own products uh for the ones that um that are experienced enough to do it or that you really facilitate um other people to to productize those yields um I think I think that's that's very important um um yeah uh yeah so for us we uh we

obviously launched with the standard size contracts that's 5 BTC and 50 e very institutional sized um you know for for the eth contract that's 175,000 notional um for Bitcoin you upwards of 300,000 um but we saw that that need for retail or the active Trader um you know especially through the covid years and you know that that real increase in in retail wanting to get involved um and and bet a better use of capital for them as well right rather than fully funding on the spot exchanges or being um subject to Auto liquidations they wanted something that was a little bit more more structured um and so we introduced

the micro contracts so they're they're tiny um 0.1 bit Bitcoin or uh ether and so for for The Ether contract your notional size is um what $300 um so so really nice and small contracts there um interestingly what we found is yes the the the active Trader is using those um and we're seeing you know upwards of 75,000 contracts traded on the retail side but with the ETFs um and with like new Structured Products coming through um institutions are actually using those micr contracts to just like test the water to dip their toes in um and with ETFs they're using them to fine-tune

their exposure so they might have you know five large contracts plus four smaller ones to really hedge that risk um also you know in terms of um volatility um it may be very expensive ensive to just go into a contract so um you know to attract retail again um we launched uh ether Bitcoin ratio contracts so you know the idea of the dominance of one contract versus the other so you don't necessarily have to take a um you know you can take more of a directional view with a ratio type contract so um yeah I think you know retail is a is a big portion um of of the market event contracts that we

launched I won't speak too much because they are um predominantly for a US audience but um you know a simple yes no contract will the price of Bitcoin be above or below X number um so that you know very retail focused um but I think a huge uh a huge opportunity there amazing okay go ahead yeah yeah no I was just saying we I mean we struggle to attract retail we find it really hard I think obviously there's like a huge US base that we can't access yeah um and I don't see that changing anytime soon um but again you know we've got a thousand clients and you know okx binance bance we've got like hundreds of thousands of clients and you know education I think they're spending a lot on educating and you see these big you know oks are doing

quite well at at their options at the moment and you can see these big spikes at weekends because a lot of our players aren't there at weekends and you know they can activate these people and then these people see this other exchange with all the liquidity and they're like oh I'll go and trade on that too so we like the fact that ok is doing well with retail because eventually they'll come and trade on darit too um but but yeah I think again options are it's complicated and with the per contract it's you know there's you know you don't have that in traditional Finance so options are never going going to get as big as they are in Ian they might but I doubt it because of the per contract but I do see that it should get substantially bigger than it is at the

moment maybe sorry just to um double down there we talked a little bit now about um you know the retail getting excited in coming in and so on but the institutional players I mean overall if you look at the macro Ma mro scale it's still quite small right what do you think are the kind of pain points that need to be addressed that would enable more institutional adoption yeah it's actually very simple I mean in the infrastructure layer you need off exchange settlement um once you have that then there's already the non-market risk of of custody being partly alleviated then there we still need to have uh improvements uh in in clearing functionality I think that's

one of the strengths of CME um but largely that's still untrusted for the the more offshore part and then you need to have open interest build to a certain extent that um large institutions feel comfortable of expressing these these complex derivatives views um yeah they need a certain size of the market uh on top of everything else would you add one very well covered I think clearing I think you know maybe we do and that's what everyone you know everyone thinks that it's going to go towards clearing I don't think the market needs it yet and if it does I think the people that are active in the market don't need a clearing house otherwise all the options would be like on CM me and they're not

but I think you know in five years time we might be having a completely different conversation and if it does go that way I think darab will join the clearing house we're not not going to do that we will do everything we can to try and stay relevant and active in in a larger market can I quickly tag that yeah so so so one of the the ways we try to um grow our distribution and and encourage a lot of people to attempt to trade an option is because we will partner with other Spa exchanges and we will let's say make it very easy for their customers to just try and trade an option on Tex like our first partner will be bitfinex and we built an integration so that their customers can very easily on board with us transer

frictionlessly and uh and trade from from from within bitf on THX and back um and and I think that model you see other people trying it now as well I think terabit could also try that at some point where you basically say options is this really complex derivative product to build but you have all these spot and and and Delta one exchanges that that that would like to have uh would like to provide their their customers exposure to that product so I I I bet that we'll see a lot of Partnerships uh like the one we've built with bitfinex um appearing actually in the coming let's say 6 months 12 months and once you actually have that type of partnership um it can actually morph into

collaborations on clearing as well because then you can essentially say okay you know this one exchange has an insurance fund the other one as well let's start to actually pull that Capital together and and really uh join forces amazing I mean I have more questions and but we're nearly out of time so I wanted to check in the audience do we have anyone who's who's got a question question for our lovely panel here this is oh yeah hit us yeah um so the the problem with with

with uh these Partnerships ultimately if you really want to provide let's say the efficiency then you need to be able to offer cross exchange cross margin and and let's say managing the clearing risk between CI and D5 is very hard but um for instance one use case that could be possible is um if anybody maybe knows about ribbon Finance it's now rebranded to ivvo but they for instance had covered call volts that are essentially tokenized um versions of um of essentially wrapped option trades right but where um it's uh it's eth uh it's an e position and and a sold call against that so those things you could toiz and then if centralized exchanges say okay I'm going to recognize that as value in

collateral you could for instance then allow market makers or other participants to say to hedge a D5 position uh with CI liquidity um and already there's an indirect link by the way because all the defi options or derives of priced uh uh in function of the of the CI ones but often the there can be price dislocations because it's it's um yeah nearly impossible to actually do an Arbitrage so so there are certain types of these tokenized versions of of di positions where you remove the the clearing concern um and you could think of these kind of uh of product ideas exciting we have less than a minute so let's quickly go down and tell me what you're most

stoked for in the next the rest of 2024 uh Chantel um I think just this year has been incredible like we've had like March was our best month ever April was our third best month ever May was our fourth best month ever we can't really complain so I just think you know with the elections coming up like it's still very much driven by volatility like d the Market's still small so I think UK elections us elections like every you know I think that's just going to create a really great year from our side fantastic yeah my hope is that the US momentum is swapping over to Europe yeah we haven't seen that yet in terms of flows yeah so uh career risk should be lower yeah I can everybody encourage the wrong allocation is 0% so these panels are

important these conferences are important so we need more investors here as well fantastic p uh wow I mean echoing that um key catalysts for us uh eth um ETF the elections and the volatility that that will bring um and yeah growth in the growth in the US coming over to to growth in in uh imia so yeah just preparing for that nice yeah and I'll I'll just add I was I was checking the uh the end of year option prices and 200k Bitcoin strikes seven Delta so the options Market say it's absolutely possible I love it exced so much bullishness I love this energy for

the rest of the year and also I want to give a quick shout out to Martin who's written this fantastic book um it's available outside and also he will sign it for you if you're interested and until next time thank you guys so much for this panel thank you