The developers of Injective Protocol, a digital assets derivatives exchange for DeFi that has been supported by Binance and Pantera Capital, have teamed up with AllianceBlock to introduce “decentralized” oil and gas futures.
The Injective team explains that in the traditional finance sector, oil and gas futures currently make up a multi-trillion dollar market. However, they’ve been out of reach within the nascent decentralized finance (DeFi) ecosystem. During the coming months, users will have the option to gain access to these derivatives on Injective’s derivatives trading platform with “up to 20x leverage.”
As noted by Injective, this new partnership “signifies a major step forwards towards achieving the development of a comprehensive bridge between the worlds of traditional and decentralized finance.”
AllianceBlock is creating a decentralized, “blockchain-agnostic” layer-2 protocol that aims to automate the process of “converting any digital asset into a bankable product.” Led by a professional team of former JP Morgan and Goldman Sachs investment bankers, AllianceBlock intends to bring “further institutional adoption to crypto markets.”
Injective confirmed that they’ll begin with the launch of oil and gas derivatives, however, over time they plan to further explore additional asset classes like “exotics.” AllianceBlock is also working to “build out a data tunnel” with Injective’s Oracle collaborators like ChainLink, which will “aid in a much more seamless integration of quantitative financial data.”
Rachid Ajaja, CEO and Co-founder at AllianceBlock, stated:
“At AllianceBlock, it is our mission to build the first globally compliant decentralized capital market, and this partnership with Injective Protocol is an incredibly important step towards achieving this goal. This is a great step towards enriching the derivative ecosystem, and in turn the next generation of investment banking infrastructure we are so proud to be developing.”
Ajaja added:
“This collaboration will allow institutional traders to fully engage with the burgeoning DeFi ecosystem. This partnership is a notable development that will ensure the well-functioning of the derivatives ecosystem we are building and we are delighted to be enhancing our market position by partnering with Injective Protocol in pursuit of the development of this ecosystem,”
Injective will be assisting AllianceBlock with generating various new derivative products that are not yet being offered in the DeFi sector. This includes the “potential creation of new crypto indices that can aid crypto investors in attaining exposure to new asset forms as a whole.” This initiative also helps AllianceBlock with sourcing additional liquidity since they are now tradable via Injective’s “fully decentralized” derivatives exchange.
Eric Chen, CEO at Injective, remarked:
“We are thrilled to be working alongside the team at AllianceBlock. This enables us to further our mission in bridging together traditional finance with DeFi. Oil and gas futures are some of the most commonly traded commodities in traditional markets but have thus far been inaccessible within DeFi. On Injective, traders will be able to trade these markets and much more on the first truly decentralized derivatives exchange.”
Injective has reportedly added several innovative markets to its derivatives exchange, which includes yield farming derivatives and stocks such as Tesla. As confirmed in the announcement, moving forward, Injective will also aim to leverage AllianceBlock’s innovative “impermanent loss hedging product” in order to expand its derivatives trading ecosystem.