- ETHBTC is an example of exotic financial derivatives which are made possibly by blockchain technology
The Universal Market Access (UMA) project has announced the launch of the ETHBTC synthetic token, which is a first of its kind token which tracks the price ratio of Bitcoin to Ethereum. Essentially, now traders can directly bet on the interplay between the Bitcoin and Ethereum markets just by trading this token, which could give rise to innovative new trading techniques.
Another reason that the ETHBTC synthetic token is the first of its kind is because it does not rely on price data from an oracle, rather it depends on a community-driven dispute mechanism in order to determine its value.
Ultimately, if ETHBTC gains some popularity, then this could herald a new era of exotic crypto derivatives products, such as the ratios of all other cryptocurrencies to one another. Although this idea sounds simple, derivative products like this are just not possible on traditional financial markets due to regulatory red tape.
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