ErisX today announced the launch of the first US-based Ether futures contracts, giving individual and institutional investors access to physically delivered futures contracts based on ETH-USD with monthly and quarterly expirations. ErisX is a unified platform for cryptocurrency spot and regulated futures trading and investing.
“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,” ErisX says in a statement.
Since its launch in 2015, the Ethereum community has grown to include speculators, product developers, and organisations and enterprises that include governmental, non-profit 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, digitised physical assets, unique non-fungible digital assets, trading and exchange applications, payments and remittances, to data management platforms and beyond, the statement says.
According to ErisX, benefits to miners, speculators, hedgers, and business that run on ETH include broader participation and diversity of actors, especially institutional, 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.
“ErisX believes in the crypto ethos of accessibility to all on equal terms,” the firm states. “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.”
The exchange outlines the CLOB concept, noting that all orders submitted to the matching engine are treated equally, they are processed in the order in which they are received without preferential treatment. Once in the order book, orders are prioritised 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 prioritised 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,” it states.
“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,” the firm notes.