Aevo mainnet launch opens decentralized futures, options
Decentralized derivatives platforms have struggled to attract sufficient liquidity, especially in the options space
vipubadee/Shutterstock modified by Blockworks
The Singapore-based team of Ribbon Finance officially opened its new product Aevo, a derivatives exchange, to the public today.
Aevo, which was first announced in September 2022, has been in a “gated” phase since April, with users needing to hold an “exchange pass” NFT for access.
“Since releasing the gated mainnet approximately 2 months ago we saw over [$70 Million] trading volume and a high of [about $5 million] in daily open interest,” the Aevo team wrote in a blog post.
The mainnet is no longer limited to NFT holders, and the platform also began offering bitcoin perpetual futures and options in addition to ether derivatives.
Aevo’s user experience is much closer to that of centralized derivatives platforms such as Deribit than has previously been available. Converting users from centralized exchanges to the dex is a major goal, Chief Technology Officer Ken Chan told Blockworks.
“The largest barriers to adoption is the conversion of a usual CEX user to a DEX user,” Chan said, asking rhetorically, “How can we make it as easy as possible for a user that has not used Metamask to perform a trade on our exchange?”
Although Ribbon and Aevo are developed by the same team, they opted for a new brand to differentiate it from Ribbon’s roots as a yield-generating platform.
“We intend to target audiences out of the usual [crypto Twitter] crowd for takers, and we intend to bring some of the structured products ideas we have built for Ribbon to become makers on the exchange,” Chan said, noting that Aevo has an all-new tech stack that doesn’t rely on Ribbon’s protocol in any way.
Aevo uses a layer-2 Ethereum optimistic rollup based on the OP Stack combined with a cloud-hosted sequencer operated by Conduit, a third-party infrastructure provider.
Onboarding consists of signing a transaction to enable trading and then bridging USDC from Ethereum mainnet using a fork of the Optimism Standard Bridge contract, according to its documentation.
Trading occurs on an off-chain order book, but all trades are settled on the layer-2, making it non-custodial. Placing, editing and canceling trades are gasless, so they don’t require a wallet signature or the use of a dedicated network RPC. The result is a very straightforward process.
The tradeoff is censorship resistance, as the order book relies on a centralized cloud-hosted server.
“We are trying to serve the middle ground of traders who do not mind this compromise,” Chen said.
Derivatives are a vital financial primitive, orders of magnitude larger than spot trading in most markets, but regulation of on-chain derivatives exchanges is still nascent. Global access to retail traders may not sit well with some financial regulators.
The Aevo front-end can be geoblocked in some jurisdictions, and the product’s Terms of Use will discourage the use of technical workarounds, Chan said.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: Unpacking crypto and the markets.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
