DerivaDEX launched a Bermuda-licensed DAO derivatives exchange
DerivaDEX has launched a Bermuda-licensed crypto derivatives platform, which it says is the first DAO-managed decentralized exchange to receive formal regulatory approval.
According to a statement from the platform, the exchange has received a T license from the Bermuda Monetary Authority and has begun offering crypto-persistent swap trading to select advanced retail and institutional participants.
A BMAT, or license to test, is issued to a digital asset business that wants to test a proof-of-concept.
At launch, DerivaDEX will support major crypto derivatives and says it plans to expand into additional markets, including futures markets and traditional securities. The company says the platform will integrate with Ethereum, which is related to onchain settlements, by allowing users to take control of their funds without any restrictions.
DerivaDEX also said the platform, developed by DEXLabs, uses encrypted order processing and trusted execution environments to combat front running and other market manipulation.
A Decentralized Autonomous Organization, or DAO, is a blockchain-based governance structure where token holders collectively vote on decisions based on rules set in smart contracts, rather than relying on traditional governance hierarchies.
Related: Fed paper presents initial margin weights from crypto-linked derivatives
Traditional asset managers are moving to DeFi infrastructure
The launch of DerivaDEX comes as traditional asset managers are engaging in decentralized financial infrastructure on public blockchains.
In the year On February 11, BlackRock launched its US Treasury product, the USD Institutional Digital Liquid Fund (BUIDL), on the decentralized exchange Uniswap. The move will allow institutional investors to trade tokenized funds on-chain, and will involve BlackRock purchasing an undisclosed amount of Uniswap's management token, UNI.
A few days later, Apollo Global Management agreed to buy up to 90 million of the decentralized financial protocol Morpho over four years, representing 9% of the token's 1 billion total supply. The $940 billion asset manager deal includes backing Morpho's decentralized lending infrastructure.
These developments come as US lawmakers continue to debate provisions of the Digital Asset Markets Transparency Act, which aims to determine how to regulate cryptocurrencies and decentralized financial platforms.
The main sticking point around stablecoin production, in January, crypto venture firms Paradigm and Variant warned that the current draft law could face uncertainty over whether DeFi developers and infrastructure providers could face registration, take-your-customer requirements or other compliance obligations designed for centralized intermediaries.
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