Deribit, a cryptocurrency futures startup, which was established in June 2016, offers fiat loans based on cryptocurrency collateral in order to solve the problems of margin calls in the crypto-based lending market.
Deribit: Crypto-backed Loans Made Possible
The pioneers of the Deribit project include John Jansen, Marius Jansen, Sebastian Smyczynski, and Andrew Yanovsky, have worked very hard to see the Futures and Options platform expand into servicing the Lending industry. Their history so far had been about providing regular day-to-day trading advantages to traders. These included the BTC futures and option trading services, margin trading, advanced orders, real-time risk management and bitcoin price indexing.
Now, with the inclusion of a lending system on Deribit, the service platform will locate the niche of lenders and borrowers who have not been able to fully maximize the potential of the lending market, whilst also creating an opportunity for new market players to thrive well within the ecosystem of the lending market.
Cryptocurrency trading can be described as the heart of every decentralized project and blockchain enterprise as a whole. While many projects pride themselves in their ability to solve real-world problems using the blockchain technology, the first few days, months, and even years of the life of most cryptocurrencies are spent on an exchange. This is because the value of the volatility market presents numerous profit margin opportunities for these cryptographic digital assets.
Driving New Demand for Cryptocurrencies
Most crypto enthusiasts are bullish about the future of cryptocurrencies in the coming years and this will, in a way, drive demand for cryptocurrencies. Those who have observed the highlights of Bitcoin’s historic price dynamics, over time are afraid to miss out on the next big thing – the bull-run. Not just bitcoin fans, other altcoin investors are also plagued by the same quandary.
The downside is that for most investors and traders it’s a really big dilemma, as they are torn between the choice to liquidate a part of their crypto stash in order to maintain a living, or to keep their investment and trading activities alive in order to maintain an uptrend quality of their crypto portfolios. Apart from the fact that they want to stay in the game and leverage more trade opportunities and strategies to make more profits, they are also unrelenting to the tax collectors’ wishes.
No Longer Choose Between Profits and Making a Living
Many cryptocurrency exchange platforms have tried to solve this problem through the provision of crypto backed lending services. However, the major downturn of events begins when volatility kicks in, and a huge downtrend plagues the market. Apparently, this affects all players – as the security of the lending business is threatened. The lender is afraid that he might lose the value of the fiat or unable to compensate with the leveraged collateral. On the other hand, the borrower doesn’t want to lose huge collateral nor risk more.
These problems have caused a huge barrier to new market players. Even those in the lending business are doing so with one eye opened, hence, the need for an exchange platform such as Deribit.
Deribit introduced new features to their platform, with some interesting trade and leverage mechanisms to bolster the lending marketplace. Some of the features of this trading platform include the use of put options. This derivative ensures that the lender’s capital is always intact and that the borrower can always pay back the loan sum, when due. The put option enables borrowers to avert the margin call risks.
Deribit aims to maintain the accolade of being one of the most liquid crypto options exchange available out there. It is believed that taking out the margin risks will open up this market to a much more favorable lending ecosystem.
Find out more about Deribit here – http://www.deribit.com/
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