The Singapore-based Ribbon Finance team has officially opened its new product, Aevo, a decentralized derivatives exchange to the public today. Known for its expertise in launching innovative financial projects, the team has integrated a unique feature into Aevo, initially announcing its development in September 2022.
During a “gated” phase from April, users needed to hold an “exchange pass” NFT (Non-Fungible Token) to access Aevo. This period saw impressive results, with over $70 million trading volume and a daily open interest high of about $5 million, according to the Aevo team.
Aevo’s mainnet launch is no longer limited to NFT holders and now encompasses Bitcoin perpetual futures and options in addition to ether derivatives. The platform is designed to be user-centric and closer to centralized derivatives platforms, such as Deribit. Converting users from centralized exchanges to decentralized exchanges (DEX) is one of Aevo’s primary goals, as stated by CTO Ken Chan.
A crucial aspect of the platform is its convenience for users who are unfamiliar with Metamask or trading on decentralized exchanges. The rebranding of Aevo from Ribbon’s roots as a yield-generating platform also aims to target audience segments beyond the typical cryptocurrency crowd.
Aevo uses a layer-2 Ethereum optimistic roll-up based on the OP Stack, combined with a cloud-hosted sequencer operated by Conduit, a third-party infrastructure provider. Trading occurs on an off-chain order book with all trades settled on the layer-2, making it non-custodial. This allows for placing, editing, and canceling trades without the need for a wallet signature or a dedicated network RPC.
One tradeoff is the decreased censorship resistance due to reliance on a centralized cloud-hosted server for the order book. According to Chen, Aevo aims to serve the middle ground of traders who do not mind this compromise.
While derivatives are critical financial tools, the regulation of on-chain derivatives exchanges remains in its infancy. This raises questions on the global access to retail traders, which might not align with some financial regulators. Aevo’s front-end can be geoblocked in specific jurisdictions, and the product’s Terms of Use may discourage the use of technical workarounds, according to Chan.
With the continued growth and technological advancements in the world of cryptocurrency, the impact and success of Aevo’s launch can shape the future of decentralized derivatives exchanges. It remains to be seen whether platforms like Aevo can successfully attract users who have been previously hesitant to engage with decentralized exchanges.
Source: Blockworks
