The growing demand from institutional investors made Deribit and Paradigm team up to launch multi-instrument block-trading solution for crypto derivatives. One of the leading institutional trading firms has already joined the trade, as it became known from the press release.
The innovation will allow organizations to use the Paradigm chat for direct transactions with counterparties at their discretion. After agreeing on a transaction, trade data will be submitted for the Deribit execution and clearing automatiсly.
What is the benefit?
This function is the first of its kind, since previously institutional traders had to agree on large trades through messengers, and then manually coordinate execution in the Deribit’s order book. The method was high-risk, especially if we take into account spreads and combined trades. About the much-needed innovation, XBTO Group’s CEO Philippe Bekhazi, said next:
For the first time, institutions that trade crypto derivatives in large volumes can negotiate privately on the Paradigm platform, after which the trade will be automatically executed, margined and cleared at Deribit and displayed on the public tape as a block trade, eliminating any execution risk associated with the order book. When excellent companies operating in a similar space work together by leveraging relationships and sharing ideas, everyone wins – including, most importantly, the end-user
Check your counterparty
Special attention is also paid to the set of counterparty management tools that the Paradigm offers. It includes the catalogue of potential counterparties and the ability to “approve” specific counterparties before the start of trading relationships. The tool will alows to check all the necessary data, including the KYC, in order to find out whether the counterparty meets the company's policies and requirements.
Companies offer two types of block trading for crypto derivatives: through the Paradigm system and directly through the Deribit’s API. Traders will have access to block transactions with futures and options for Bitcoin (BTC) or Ethereum (ETH), including spreads and combinations of these cryptocurrencies.