Partnership with Hedget
DIA announces a collaboration with the decentralised derivatives provider Hedget. Hedget will make use of DIA’s price oracle infrastructure to value their decentralised options.
DIA and Hedget announce a collaboration to both deliver option and derivative data to the DIA platform as well as leveraging DIA’s open-source oracle infrastructure and price feeds to value Hedget’s derivative products.
Despite DeFi currently being one of the hottest and most relevant topics on the blockchain, it is still subject to one of the biggest challenges that this entire nascent industry faces: volatility risk. While showing huge growth, the industry is still minuscule — by absolute measure — when compared to traditional financial markets.
This is where Hedget aims to fill a gap. Hedget aims to reduce volatility and allow investors into decentralised financial products to hedge their exposure. This is nothing new in general, however it comes with a few twists. As an add-on to other DeFi platforms, Hedget aims to make it extremely easy to “protect” a position by adding a small premium while in the background an option is created to serve this purpose. In addition, Hedget uses Chromia — a relational database in blockchain format — to execute all the more complex transactions, while keeping settlement on Ethereum in order to mitigate scalability and gas prices challenges.
“Digital assets are very volatile, which is a risk that can and should be mitigated. We wanted to hedge that risk for DeFi protocols using decentralized options, but found that there isn’t a single solution out there that satisfies DeFi requirements while also being liquid and easily traded. So, we are building it. ” said Malcolm Lerider, cofounder of Hedget.
In order to create and execute options, Hedget requires near real-time and fully transparent pricing data for all the options it plans to offer now and in the future. Initially these are limited to the major digital assets, but are expected to become more granular and fragmented in the future. To serve this need for transparency and scalability, DIA will offer price oracles for all options offered by Hedget. Similarly, DIA will, in the future pull derivative price and metadata from the Hedget platform and make them available as oracles.
“Hedget has a really interesting approach to their options infrastructure. Keeping critical transactions off the Ethereum network is a promise for more efficient and effective hedging tools”, Paul Claudius, CTO of DIA says. “We are happy to provide Hedget with the data infrastructure to fuel their operation.”