A collaboration has been established between Layer 3 blockchain Orbs and OTC derivatives platform SYMMIO. The collaboration will facilitate the growth of on-chain derivatives trading, which leverages deep liquidity and improved capital efficiency.
For its blockchain and DEX-agnostic Liquidity Hub, which operates on top of AMMs and solves the problem of liquidity fragmentation in DeFi, Orbs has experienced a significant increase in demand. Orbs hopes to provide similar tools for derivatives traders through its partnership with SYMMIO to promote more effective capital allocation.
Orbs and SYMMIO will leverage Orbs’ current layer 3 technology to focus on a variety of use cases related to onchain derivatives. The two are currently exploring the development of an oracle for on/offchain communications. Furthermore, they want to work together to develop a bidding mechanism that will allow hedgers to minimize risk and profit from the volatility of derivatives trading.
On centralized exchanges, trading volumes are dominated by derivatives at a ratio of 4:1; However, this is not the case on the blockchain, where derivatives represent just $2 billion of DeFi’s $60 billion TVL. This imbalance will be corrected through the collaboration of Orbs and SYMMIO, allowing on-chain traders to initiate leveraged positions, use their funds effectively and hedge against downside risks.
SYMMIO has developed a smart way to facilitate intent-based OTC derivatives trading to address the problem of limited onchain liquidity. Quotes from many hedgers are sent directly to the user when they want to establish a position on a frontend powered by SYMM.
To implement SYMMIO, the frontend must determine which quote best fits the user’s parameters and generate an intent that is sent down the chain. As long as the parameters match their quote and the deal is completed onchain, at which point both parties have locked collateral, the resolver will accept this intent.
The ability of SYMMIO’s solution to enable hedgers to access external liquidity from any source (including CEXs such as Binance) is one of its advantages. Compared to other derivatives platforms, this provides significantly more liquidity, which significantly improves capital efficiency. Orbs hopes to increase the use of this advanced technology by partnering with SYMMIO and offering traders a more secure way to gain exposure to on-chain derivatives.