Delta Exchange (https://delta.exchange/), a digital asset derivatives exchange, announced today the launch of perpetual swaps for Yearn.Finance ($YFI). The contracts will allow users to trade $YFI with up to 20x leverage, margined, and settled in BTC. Trading of $YFI on Delta Exchange begins August 30, 2020, at 10:00 am PST.
Perpetual swaps for $YFI-$BTC will allow traders to hold their positions for as long as they desire without an expiry date; while staying within range of the spot trading price. This will allow traders to gain long or short exposure to $YFI’s price movements without having to hold or borrow the asset. At the time of writing, $YFI has exceeded an $850 million market cap. However, with the large fraction of $YFI locked in various DeFi protocols, the asset itself suffers from a lack of liquidity on centralized marketplaces.
“The limited supply, in the coin, has resulted in volatile price action and uni-directional price movement,” said Jitender Tokas, co-founder of Delta Exchange. “The introduction of perpetual swaps for $YFI will help address this concern and add significant value to traders by making the price action more manageable and enabling them to hedge their exposure.”
The launch of perpetual swaps will create a “synthetic supply” of $YFI and thus ease the supply constraints while providing a way for traders to short $YFI to curb against sharp moves and reduce volatility.
Currently, there is close to $1 billion worth of total value locked in $YFI. Yearn.Finance’s decentralized ecosystem maximizes yield by aggregating from lending services such as Aave, Compound, Dydx, and Fulcrum and automatically optimizing for profit. According to Coingecko, $YFI’s price is up 566.2% in the last 30 days.
The $YFI-$BTC listed on Delta Exchange will allow traders to participate in $YFI using leverage. Thus to gain exposure to 1 $YFI, traders will have to keep only 10% of the value of $YFI as collateral. By trading the $YFI-$BTC contract on Delta Exchange traders will be betting on the relative performance of $YFI over that of Bitcoin. The gain or loss on the $YFI position has to be looked at, relative to the performance of Bitcoin. This would help reduce sensitivity to any kind of crypto-specific correction or shock. If $YFI falls 20% but alongside BTC also falls 10% then a trader’s position will only suffer 11% loss.
Beginning today, perpetual swaps for $YFI-$BTC will be available on Delta Exchange.
To date, $LEND-$BTC and $LINK-$BTC are the most active $BTC perpetual swaps on Delta Exchange.