We are happy to announce that MARKET Protocol, a decentralized derivatives protocol enabling safe, solvent & trustless trading of any asset, is utilizing the Dai stablecoin as the quote currency for MARKET contracts. Using Dai as a quote currency in MARKET contracts lets traders create and trade dollar-denominated relationships like stocks, bonds or other crypto assets. Since one Dai is always one US dollar traders, speculators and hedgers all benefit from the price stability provided by Dai.
Price stability is one of the issues limiting adoption in the cryptocurrency space. Both MARKET Protocol and MakerDAO address volatility in the blockchain space. Combining the derivative framework provided by MARKET Protocol with the stability offered by the Dai stablecoin provides trader the tools to hedge and manage risk effectively.
MARKET Protocol enables traders to create and trade contracts deriving value from on-chain, off-chain or cross-chain assets. MARKET contracts allow traders to buy or sell any crypto asset without taking custody of or storing those assets. Furthermore, users can create and trade relationships like Google stock or barrels of oil while remaining in crypto on the Ethereum blockchain. Using MARKET Protocol traders and businesses can effectively manage risk by separating the price of crypto assets from their utility — a necessary step towards scaling the space.
The quote currency in MARKET contracts defines the token for profits, losses and collateral. Although any ERC20 token can be used as a base currency, we expect many relationships to utilize a stable-coin like Dai.
Beginning with Ethereum and expanding to other ERC20 assets users can generate Dai on demand with the Maker Platform. Anyone who has collateral assets can leverage them to generate Dai on the Maker Platform through Maker’s unique smart contracts known as Collateralized Debt Positions. Once generated, Dai can be used in the same manner as any other cryptocurrency: it can be freely sent to others, used as payments for goods and services, or held as long-term savings.
MARKET Protocol may also utilize MakerDAO’s oracle to pull in their trusted ETH/USD reference price allowing contract users to incorporate this index in trading relationships.
Seth Rubin, CEO and co-founder said, “Traders don’t want to win on their trade and lose on their base currency which can happen with crypto denominated trading relationships. DAI provides traders price stability.”
“MARKET Protocol provides a way for holders of crypto assets to gain long or short exposure to a wide variety of assets.” commented Greg Diprisco — business development lead at MakerDAO.
Learn more about MARKET Protocol:
MARKET Protocol is powering safe, solvent & trustless trading of any asset. We offer a decentralized framework allowing traders to establish long or short positions without lending or borrowing. Contracts are guaranteed solvent with no counterparty risk.
Learn more about MakerDAO:
We believe in a future that leverages the power of decentralization for trustless transactions. With Maker, we are carrying out our vision of creating a decentralized stablecoin that will unlock the unique benefits of a complete financial ecosystem on the blockchain. Join us!