Trading interest rates on-chain

Discussion
1

Hmmm just a passing thought as I peruse the best FX derivative products in Trad-if and knowing one day it will all run on-chain in DeFi :upside_down_face:

the real product that makes the most money for the Chicago Mercantile Exchange is not equity or commodity derivatives, but

the “euro /dollar Futures Contract” an FX product -

Knowing this Onomy could at some point leverage this and pioneer the trading of interest rates on-chain.

For example we have for the first time ever an eth staking yield - a native commodity that has its own yield that has no tie back to the dollar or anything in trad-fi, eth just yields 4 or 5%. (Onomy and many other PoS assets also have a yield)

So how are we going to harness yields to trade and hedge different types of things in an interest rate capacity? this is a lot more complicated than it sounds to do on-chain which is why some of these things haven’t taken off yet so seeing more projects offering some Innovations on how to make trading interest rates appealing for the crypto trader dgen guy who likes going 100x long on perp swaps for Bitcoin/dollar eth: dollar- maybe FX on-chain is the entry point that we can build from….

we start creating a real Internet Financial system #IFS when Bitcoin Eth and Onomy / denoms and all these different digital assets are used to borrow and lend to fund real businesses and they have yields and yield curves at different maturities.

The amount of trading that’s going to happen in the interest rate space is going to dwarf anything we’ve ever seen and so how do we take that and drill it down into something that’s defi native that makes sense for people trading on-chain?

In the future in the realm of the #IFS It’s not going to be the same as is trading on the Chicago mercantile XCH - we have to make our De-FX version of it that is a defi innovation it’s not something that happens in trad-fi first that is copied.

2

We are almost through the entire original scope of the Onomy Protocol when proposed prior to mainnet launch November of 2022. Now that we are nearing launch of the Onomy Exchange (ONEX) and are finishing development of the Onomy Reserve (ORES), it is a good time to look at product classes that may build upon the base currency and hybrid exchange primitives that were the original plan to bring Forex to the blockchain. Forex spot market is the current scope of the project where the resources are focused.

Once those primitives are launched, I agree what next? Products that link two currencies such as Interest Rate Products provided by the CME Group are obvious targets once the primitives are in place. In addition to existing TradFi products, I would also encourage ideation around other financial products that might be unique to the Onomy “walled garden” aka Internet Financial System.