Hxro Begins Testing Crypto Derivatives Trading Platform on Solana

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Crypto derivatives marketplace layer Hxro conducted a test launch on the Solana mainnet Friday with a handful of bitcoin futures contracts that use a dummy token as collateral.

Hxro’s “alpha sandbox” won’t put traders’ real money at risk, co-founder Dan Gunsberg told CoinDesk. That’s because the contract collateral is UXDC (a play on USDC and Hxro), a valueless, simulated stablecoin Hxro minted to stress test the network before public launch.

The test phase moves Hxro one step closer to bringing its institutional-backed decentralized finance (DeFi) derivatives hub to full operation. Quant trading firm Susquehanna International Group, Alameda, Jump and the Chicago Trading Company are among Hxro’s funders and participants assisting with core functions, such as market making.

Gunsberg said Hxro aims to become a hub for derivatives trading atop the Solana blockchain. “What we as a network are really focusing on is bringing in applications to build on top of the network and all of the liquidity from each of those networks will bottom out into” Hxro.

Staging a derivatives platform atop Solana (or any blockchain, really) means full transparency into each trade and trader, Gunsberg said. That can benefit the entire market by making clear as code who is taking on inappropriate risks, he said.

“Likely one of the causes of the issues that we're dealing with now in the marketplace is a lot of risks ended up being managed almost by relationship, where you looked at a firm like Three Arrows Capital, and made assumptions about them without actually doing the level of due diligence that needed to be done,” Gunsberg noted.

Hxro isn't the only effort to bring DeFi futures trading to Solana: There’s also Drift, Cypher and Zeta.

Read more: Coinbase Launches First Crypto Derivatives Product Aimed at Retail Traders