The Derivative Markets Idea Competition Winners
The winners of the recent Derivatives Market Idea Competition are being announced today. Here at Injective, the community and the input from followers allows contributors to devise new ideas and markets to create a truly decentralized and innovative experience on the decentralized derivatives exchange.
Participants were invited in August to draft a proposal for an innovative market idea that could be introduced in the future to the DeFi and derivatives space. These proposals were reviewed and critiqued by notable blockchain and cryptocurrency professionals from companies such as Binance, Kraken, and OKEx. Users were asked to submit the market design, product overview, proposed financial and technical infrastructure, pricing calculations, risk analysis, value proposition, and product utility.
Submissions came from some of the top universities around the world such as Stanford, Harvard, MIT, and Cambridge. In addition, submissions were made from contributors to top projects within the blockchain sector today such as Filecoin and Polkadot.
It was an immensely difficult decision for the judges to select the winners given the high level of sophistication and creativity found across all of the submissions received. However, three ideas stood out to the judges above the rest.
1st Place: Lending Protocol Index
Lending protocols allow long-term investors who are currently holding crypto assets to lend out these assets and earn interest. Given the surge in demand for these protocols, this Lending Protocol Index (Ticker: LPX) will specifically track DAI and USDC yields across Compound and Aave, two of the most popular lending protocols today. This will create an avenue for which investors can gain exposure to DeFi yield while investing only in a yield basket that tracks DAI and USDC yield across reputable protocols. Additionally, this allows the investor to avoid any exposure or risk from yield volatility or smart contract failure that is usually present in any single lending protocol.
Injective judges believe that LPX is an innovative idea that will benefit the DeFi community and present new opportunities for investors. In the future, this idea can be integrated into Injective’s DEX.
2nd Place: Black Lotus Card Derivative
Black Lotus is a very sought after trading card that was involved in the game Magic: The Gathering. Magic: The Gathering is a trading card game that was printed and played beginning in 1993. Many of the cards printed were limited edition and are in high demand today. The Black Lotus card is currently one of the rarest cards.
Given how rare the Black Lotus card is, only a few cards are sold per month. The prices of these cards are publicly available on various sites and have for around $11,000.
Tracking the Black Lotus card’s prices could fit well on Injective’s derivatives exchange. The Injective derivatives market would host a quarterly futures market that cash-settles with the settlement price being the median of the last 5 sales of Black Lotus cards for that quarter to date, taken from the echomtg price API.
This project demonstrates Injective’s scope and the exchange’s ability to create and host any type of derivative market.
3rd Place: Crypto Spread Option
Today, in the crypto space, there have been countless hard fork style splits due to various reasons including ideological differences, unfortunate hacking events, developer team disagreements, and so on. Financial participants and investors shouldn’t be subject and vulnerable to development divergences or hacking induced by these contentious hard forks and disagreements.
This is where the Crypto Spread Option enters. This spread option is a derivatives vehicle that will be crypto-specific, brand new, and a powerful tool for investors to gain added security in the DeFi space. The spread options, once adopted in cryptocurrency derivatives markets and commodity markets, can efficiently hedge against possible hard fork risk and create more flexible inter currency exchanges.
Judges at Injective Labs loved this idea and how it is able to expand Injective’s exchange to a vast group of investors and traders.
A Plethora of Opportunities on Injective
The opportunities for Injective’s DEX are endless.
All of the submissions were fantastic and all ideas within the community are valued. The exchange would be nothing without the creativity and innovation of its users.
Congratulations to all winners!
Injective is a custom interoperable layer one protocol for building powerful exchange, DeFi, derivatives & Web3 applications. Injective was created using the Cosmos SDK and is able to achieve instant transaction finality while sustaining lightning fast speeds. INJ is the native deflationary scarce asset that powers the Injective Protocol and its rapidly growing ecosystem. Injective is incubated by Binance and is backed by Pantera Capital.