1. Full Suite of products
Perpetuals futures currently dominates the decentralized derivatives exchanges. Based on Coingecko's data, daily trading volume typically ranges from $2 billion to $5 billion. As the name suggests, a perpetual future contract is a unique future contract with no settlement date. It is designed to imitate a margin spot market, so the price of a perpetual future contract is similar to the underlying's index price, which is an average spot price from various credible exchanges. Since there is no expiry date, a funding mechanism is required to prevent the contract's price from deviating too far from the spot price. As a derivative, perpetual future contracts allow hedging against the potential risk of the underlies. Additionally, perpetuals let speculative traders bet against underlies' performances in a leveraged position without holding the assets. Such a feature is practical for traders with limited capital or trading on different blockchains, i.e., gaining exposure to Bitcoin on Ethereum.
Aboard currently provides seven pairs of perpetual contracts for trade, namely AAVE-USDC, BTC-USDC, ETH-USDC, LCix- USDC, LINK-USDC, SUSHI-USDC, and UNI-USDC. Users can choose up to 25X leverage and utilize a cross-margin trading system to maximize capital efficiency. Every 8 hours, the funding fee ensures the contract price stays around the corresponding index price. All perpetual contracts have insurance funds, limiting the probability of counterparty liquidation. Aboard Exchange will initially inject capital into the funds; After the initial stage, contract trading fees will become the primary source of the insurance funds.
By Q2 2022, Aboard will have 60 perpetual contracts available.
Check guide documents for implementation details.
In traditional finance, indices and index futures are critical components and criteria in most investment strategies. Instead of holding a basket of spots, investors can expose to a specific industry by buying index spots or futures. They can speculate on the direction of the index with only one contract or extract market alpha by purchasing strong tokens and hedging with shorts on the index future.
All major traditional markets have index future products, such as E-mini S&P 500 and E-mini Nasdaq-100 in the United States, Hang Seng index futures in Hong Kong, and CSI 300 in China.
Surprisingly, the decentralized cryptosystem does not have such products. Aboard launched the LCix-USDC index perpetual futures to fill the gap in Jan 2022. The LCix index is a capitalization-weighted index that tracks the performance of Bitcoin, Ether, and Binance Coin. LC stands for large-cap, and ix means index. BTC, ETH, and BNB are the top 3 tokens ranked by capital.
The mechanism and features of perpetual index futures are similar to that of all perpetual futures contracts. The only difference is that now traders are betting on the combined direction of the three assets.
By Q2 2022, Aboard will have five indices/matching derivatives available. Upcoming indices are Metaverse Index, Infrastructure Index, Defi Index, NFT index, and Public Chain Index.
Check guide documents for implementation details.
Options are specific opportunities unique to option holders that allow the owner the right, but not the obligation, to either buy or sell in the future. Similar to futures, options are great hedging tools. Also, it allows spectators to bet on market directions with limited downside risk and low cost. For more sophisticated traders, options enable them to create diverse trading strategies, such as betting on volatility. Options are among the most traded financial derivatives in the traditional financial market. Research by CBOE Global markets states that options have more average daily notional traded than stocks since 2020, with an annual daily average of over $400 billion. DeFi markets will see an increasing need for options with similar characteristics soon.
Aboard's option system will employ a traditional T-shape display, and the contract sequence is automatically generated according to the current price of the underlies. Aboard will introduce market makers and adopt external implied volatility to rationally price options and smooth out the trading experience. Additionally, the exchange maximizes capital efficiency for each asset by charging a portfolio option margin aligned to the greek risk dimensions.
Aboard supports automatic settlements. Upon expiry, the exchange will carry out cash settlement for open positions according to the underlying price.
By Q3 2022, Aboard will offer various traditional options with fixed maturity. In the future, depending on the user's need, we will launch perpetual option contracts.
In addition to previously mentioned products, Aboard Exchange plans to launch other products, including lending & borrowing, margins, and spots. Margins and Spots trading will be available by Q2 2022. Lending and borrowing products will be available by Q3 2022.
With such a wide selection of products, traders can choose the best-fit products according to their risk preferences and portfolio needs.