Hxro Uses Switchboard Permissionless Oracles to Build Permissionless DeFi
“Switchboard is an absolutely amazing product. It is dead-simple to use, extremely robust, and the team is very responsive. It has saved us countless engineering hours.”
Synopsis
Story: Dexterity Markets is an open-source collection of smart contracts that provides the exchange, risk, and settlement functions needed to launch and maintain any type of derivatives contract market such as perpetuals, expiring futures, and options. Within Dexterity, Hxro core contributors have developed Zero-Day Futures (ZDFs), a new derivatives contract that simplifies short-term speculation on crypto assets.
Situation: Zero Day Futures ZDFs require reliable and secure real-time market data for secure risk adjusted pricing to open, close and settle positions, even during volatile market conditions. Especially when supporting “long tail” assets where price sources may be fragmented and have lower liquidity.
Switchboard Solution: Dexterity leverages Switchboard’s robust data feeds for index prices, which are utilized for calculation of settlement prices at contract expiry and funding rates for perpetual swaps & zero day futures. Switchboard helps Dexterity quickly support new markets in liquid and illiquid assets with easy to use, custom oracle price feeds!
Let’s dive deeper into how Hxro utilizes Switchboard!
Story
Over the past few years crypto trading volume has largely migrated from spot markets, like to various forms of derivative markets. . Derivatives, like perpetual futures, enable traders to express a position in an asset in either direction with leverage. However, many traders find futures complex and market makers avoid illiquid pairs due to price manipulation risks & an inability to hedge underlying risks. ZDFs provide a solution for traders and market makers to trade all types of assets whether blue chips like $BTC and $ETH or on the latest trending altcoins, on a hassle-free venue for short-term, intraday speculation & hedging.
Hxro Dexterity’s new derivatives contract, Zero-Day Futures (ZDFs) are future contracts with a 25-hour expiration cycle. Similar to expiring or perpetual futures, ZDFs can be traded both long and short during the life of the contract. Any open positions at expiration that are not closed or rolled will settle to USDC back to the traders account. This creates a hassle-free venue for short-term, intraday speculation, allowing traders and market makers to easily tap into any market without having to worry about being stuck in a position.
- Trader friendly derivative: Short term and margin-based speculation
- Market maker friendly: Easily hedge short term positions
- Short term cash settlement: Daily expiration with settlement paid with USDC
- Permissionless market: Any asset can be traded if an on-chain oracle is provided
Situation
To provide a competitive edge and ensure fair market value, Dexterity needed an oracle.
- Reliable Data: Reliable, real-time and low-latency market data of index prices are crucial for Dexterity to calculate precise settlement prices at contract expiry and funding rates for perpetual swaps.
- Customizable: Dexterity requires a configurable oracle to tailor fit data feeds for any market (with an existing data source), while defining the indicators used for pricing and settlement (such as TWAP, VWAP, EWMA, etc).
- Permissionless: In order to achieve speed for execution, a permissionless oracle infrastructure is necessary to allow users to build their own data feed and open their market frictionlessly.
Switchboard Solution
Dexterity integrates with Switchboard to facilitate the launch of Zero-Day Futures (ZDFs). By leveraging Switchboard’s robust data feeds, Dexterity sources pricing data for the underlying assets of ZDF contracts. The index prices are then used for calculation of settlement prices at contract expiry and funding rates for perpetual swaps.
Switchboard’s customizable oracle empowers Dexterity to effortlessly tailor, build, and manage price feeds that bolster ZDF markets, granting them the flexibility and capacity to incorporate a diverse spectrum of underlying assets, ranging from major market assets to niche, long-tail assets. With the ability to define calculations, Dexterity can employ various price indicators beyond using instantaneous prices, such as TWAPs or VWAPs. With this, ZDF guarantees fair market valuation and safeguard against potential price manipulation attempts.
With Switchboard’s user-friendly and permissionless development tools, Dexterity can build effortlessly, thus minimizing engineering efforts that can be redirected towards enhancing the user experience. The comprehensive documentation and support from the team, along with Switchboard’s powerful oracle, position Dexterity to achieve faster implementation–crucial for keeping pace with the dynamic crypto market.
Summary
Zero-Day Futures is a derivatives contract that simplifies short-term speculation on any crypto asset with an on-chain oracle, powered exclusively by Hxro Network’s, Dexterity. ZDFs are plugged in by Switchboard from Day 1 and will continue to grow and scale with Switchboard.
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About Hxro: https://hxro.com/
Hxro’s Documentation: https://docs.hxro.network/
Contact us: https://switchboard.xyz/contact
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Discord: https://discord.gg/switchboardxyz
