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A collaboration between Layer 3 blockchain Orbs and OTC derivatives platform SYMMIO has been established. The collaboration will facilitate the growth of onchain derivatives trading, which leverages deep liquidity and improved capital efficiency.
For its blockchain- and DEX-agnostic Liquidity Hub, which operates on top of AMMs and solves the issue of liquidity fragmentation in DeFi, Orbs has experienced a considerable increase in demand. Orbs hopes to provide comparable tools for derivatives traders via its collaboration with SYMMIO in order to promote more effective capital allocation.
Orbs and SYMMIO will use Orbs’ current layer 3 technology to concentrate on a variety of use cases related to onchain derivatives. The two are right now looking into the development of an oracle for on/offchain communication. Additionally, they want to work together to develop a bidding mechanism that would enable hedgers to minimize risk and profit from the volatility of derivatives trading.
On centralized exchanges, trading volumes are dominated by derivatives at a 4:1 ratio; however, this is not the case on the blockchain, where derivatives account for only $2B of DeFi’s $60B TVL. This imbalance will be corrected by Orbs and SYMMIO’s cooperation, which will enable on-chain traders to initiate leveraged positions, effectively use their money, and hedge against downside risk.
SYMMIO has developed a clever way to facilitate intent-based OTC derivatives trading in order to address the issue of restricted onchain liquidity. Quotes from many hedgers are sent straight to the user when they want to establish a position on a frontend powered by SYMM.
In order to implement SYMMIO, the frontend must determine which quote best fits the user’s parameters and generate an intent that is sent across the chain. As long as the parameters match their quotation and the deal is completed onchain, at which time both parties have locked collateral, the solver will accept this intent.
The ability of SYMMIO’s solution to enable hedgers to access external liquidity from any source—including CEXs like Binance—is one of its advantages. When compared to other derivatives platforms, this allows for substantially more liquidity, which greatly improves capital efficiency. Orbs hopes to increase the use of this cutting-edge technology by working with SYMMIO and provide traders a safer means of being exposed to onchain derivatives.