Today, we introduce the first U.S. based Exchange-traded Ether futures contracts. Starting today individual and institutional investors can access physically delivered futures contracts based on ETH-USD with monthly and quarterly expirations. The ErisX futures exchange trades alongside the ErisX spot market on a unified and innovative platform enabling price transparency and collateral efficiencies.
ErisX believes that robust, transparent and regulated financial markets are critical infrastructure that enable price discovery, risk transference and hedging opportunities. These are foundational elements of well functioning capital, commodity and commercial markets globally. We are proud to bring this infrastructure to the benefit of the Ethereum network and look forward to seeing the market for ETH benefit from these risk management tools. Read below for more information about how our products benefit the Ethereum network or start trading them now.
Ethereum Use Cases and Market Benefits
Since its launch in 2015, the Ethereum community has grown to include speculators, product developers, and organizations and enterprises that include governmental, nonprofit and for-profit entities. Use cases for Ethereum, and its native crypto asset Ether, currently run the gamut from potential financial and commercial applications, prediction markets, voting and identity systems, digitized physical assets, unique non-fungible digital assets, trading and exchange applications, payments and remittances, to data management platforms and beyond.
We are thrilled to introduce standardized, CFTC-regulated futures products, on a robustly operated trading and custody infrastructure. Benefits to miners, speculators, hedgers, and business that run on ETH include:
- Broader participation and diversity of actors, especially institutional actors, including investors, speculators, intermediaries, hedgers, miners/validators, and commercial users;
- A diversity of time horizons and trading objectives, expressed through transparent instrument pricing and trading;
- More robust, liquid, and resilient markets;
- Markets able to integrate more information, quicker, into more efficient and accurate price discovery; and
- Improved risk management for asset owners, market makers, and miners/validators.
We wrote an in-depth piece about how miners are the modern hedgers in today’s markets as well as a piece on the similarities between cryptocurrencies and gold. Both traditional hedgers and commodities set instructive precedents in how to progress and build out crypto derivatives.
Regulation and Licensing
ErisX is a unified platform for cryptocurrency spot and regulated futures trading and investing. Our infrastructure and operations, designed for regulatory compliance, protect our Members from market manipulation and fraud as well as preserving market integrity. Based in the United States, we provide markets price discovery, liquidity and collateral efficiencies within licensing and regulatory oversight:
- Futures market regulated under the jurisdiction of the Commodity Futures Trading Commission (CFTC)
- Spot market licensed in accordance with state and federal licensing requirements
- Voluntarily application of CFTC core principles to our spot market
Transparent Market Model
ErisX believes in the crypto ethos of accessibility to all on equal terms. Our Ethereum futures contracts trade in our time-tested and proven central limit order book (CLOB). This ensures that the best price on the market is accessible to everyone. CLOBs enable all participants to trade with each other without requiring new and exclusive agreements with each counterparty, and our surveillance program works to prevent malicious activity. CLOBs are used in traditional commodity markets by leveraging a matching engine that employs a price/time matching algorithm:
- All orders submitted to the matching engine are treated equally, they are processed in the order in which they are received, no preferential treatment.
- Once in the order book, orders are prioritized first by price (bids are ordered priced highest to lowest, and offers are ordered priced lowest to highest), and then by time within each price band (at a given price level, orders are prioritized per time of arrival from oldest to youngest).
This is an explicit rule that the ErisX matching engine strictly follows to preserve equal access and prevent market manipulation. Our model also avoids the potential conflict of interest that arises when trading venues run their own trading desks. ErisX does not trade for itself, therefore there are no profits to be made trading against our customers.
Ethereum has genuine functionality and use cases with real people, firms and governments using the network, and it’s structure has many similarities with existing commodity markets. ErisX has taken precedents and standards already in existence from established capital markets to offer secure, transparent and innovative access to Ether. If you are ready to start trading our Ethereum futures contracts, please log in here or email email@example.com.