Decentralized Derivatives Exchange Development – The Beginner’s Guide

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Introduction:

2022 is going to be the year of crypto derivatives. The exponential rise of decentralized perpetual futures trading volume will propel the infrastructural growth, leading to more entrepreneurs getting going on centralized and decentralized derivatives exchange platform development.

Reason for the Growing Appetite of Derivatives

Hedging and speculation are two major trading practices steering the activities around derivatives. Investors might buy a derivative contract whose value progresses in a conversing direction to the asset they already own to hedge the risk vulnerability. Alternatively, they may wish to multiply their revenues with derivatives contracts based on a well-gauged guess.

The utility of derivatives surpasses the trader’s or investor’s interests. Derivatives play a lead role in hedging against inflation and deflation, and global diversification and therefore lead to an efficient and mature market.

Derivatives in the world of decentralized finance

Derivatives aren’t a new concept for the crypto world. Centralized exchanges initiated immersion into the profitable derivatives business long ago in 2014 and therefore CeFi derivatives have ripened to a great extent.

The emergence of derivatives in decentralized finance exchange platforms, however, began in 2020. Decentralized derivatives, unlike centralized ones, don’t need brokers for trading. The smart contracts stimulate settlement over the blockchain networks after the fulfillment of certain preset conditions.

Top 5 DeFi derivative Protocols of 2022

It is undeniable that the gamechanger intersection of DeFi and derivatives has unlocked new avenues for borderless, barrier-free financial instruments in the financial world.

For the businesses planning to launch into the DeFi market with a decentralized derivatives exchange platform, it is imperative to explore the internal environment of the market. Here’re some of the prime participants that entrants must know about as they have already set the perfect storm to propel the growth of derivatives in the cryptofinance market:   

1. Synthetix

Synthetix is one of the most popular derivative trading platforms enabling seamless trading of blockchain-powered synthetic assets.

2. OPYN

Initially built for proffering DeFi-based crypto-insurance solutions, the decentralized finance ecosystem built on convexity protocol enables investors to make money from speculations with options trading.

3. MCDEX

MCDEX is a decentralized finance exchange facilitating traders to trade on long positions with decentralized perpetual and capitalize on 10X leverage.

4. Barnbridge

Barnbridge risk tokenizing protocol brings in Structured Market Adjusted Risk Tranches (SMART) products to allow users to leverage derivatives for risk-averted exposure. 

5. Siren

Siren is a decentralized protocol catering to experienced options traders enabling them to benefit from autonomy, composability, and self-custody.

Things to Consider While Hiring Developers for Decentralized Derivatives Exchange Development

Finding the best developers for decentralized derivatives exchange platform development can be a daunting task as DeFi development is a skill-intensive job that requires knowledge and experience of working on diverse blockchain technologies.

Before you work on selecting the right candidate, you must consider the type of project, its specific technical requirements, its length, and the degree of complication. Then, based on your project-specific requirements, you can get started with the selection process.

Here’re some of the qualities that must reside in the blockchain developer you are counting on for your decentralized derivatives exchange development:

1. Deep-Rooted Understanding of Blockchain Technology

Don’t hire anyone who just mugged up some technical jargon to convince you that they have great knowledge of blockchain development. Test their skills if you are hiring an in-house developer and check the portfolio if you are hiring a full-fledged crypto platform development company. They must also have a vast knowledge of DeFi-based protocols and frameworks.

2. Vast Experience in DeFi development:

Their past work experience must include decentralized finance exchange or dApp development. In case you are hiring a blockchain development agency, make sure that they offer decentralized finance exchange development services and have expertise in crypto derivatives development as well. A reputable technology provider may also have hands-on experience in working on decentralized derivatives platforms.

3. Detailed understanding of smart contracts

Since decentralized derivatives platforms are wholly and solely driven by smart contracts, there is no use in hiring a developer who doesn’t have an extensive understanding of smart contracts and their algorithms. Make sure that the development professional knows even the minutest details of smart contract development.

4. Diverse Development Skills

You might not find a blockchain developer having expertise in diverse programming languages but you would certainly find a blockchain development company having dedicated developers with all your required programming skills. Ruby, Python, JavaScript, Solidity, rust, and C++ are some of the programming languages that might be required for decentralized derivatives exchange platform development.

5. Availability to deliver the project on time

When outsourcing blockchain development expertise, you must consider their availability and match them with your time constraints. There is no point in discussing the competency if the development company cannot deliver the project within your required timeframe. So, always consider the availability of resources as the priority when you have to launch your decentralized derivatives exchange within a restricted time frame.

Last Words

Venturing into the decentralized derivatives market is not going to be a cakewalk. So, it is recommended to choose experienced technology providers with a diverse pool of talent who have extensive experience in blockchain development.

Antier Solutions is a global leader in consulting, IT services, and business solutions having 15+ years of overall experience in the industry. We have successfully empowered 100+ clients with blockchain-based applications.

Connect with our subject matter experts to discuss your needs for decentralized derivatives exchange development.