Traditional Futures Markets on Jupiter

General
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Hello all!

I have been involved in crypto trading since 2017 but in a past life have been a professional futures trader and a risk manager. I specialized in fixed income (bonds), but have spent most of my career in the grains market (corn, wheat, soybeans).

I am here as per request of @weremeow on Twitter ([Preformatted text](https://twitter.com/weremeow/status/1754001985257525677)
jup_ag

My vision is straight forward. The difference between trading on Traditional Exchanges and Crypto Exchanges should be negligible by the end of this decade.

How we get there is the question, but with blockchains, possible.

One way to do that is simply by listing crypto futures that settle to standardized traditional futures markets via oracles every minute/hour/day. Although oracles are solution for pricing, the problem from there would be attracting liquidity/trade.

This is where the demand comes in. We do not need to list every single type of futures that exist, we just need to concentrate on the ones that are most relevant to the trade for starters. This would be the equity futures contracts (S&P E-Mini), bond futures (US 10 Year Treasury Futures), and several commodity futures contracts (e.g. WTI Oil futures).

How would it sound then that anywhere in the world you could trade these US listed futures contracts without opening a brokerage account?

How would it sound if we could have one account for everything regarding trading instead of splitting it up between the traditional world and the crypto world?

How would it sound if fees to transact would be reduced and market data would be free?

In my opinion, these are clear advantages that blockchain-enabled exchanges have while respecting the traditional ones and they don’t take long to set up…

Here’s a quintessential markets-in-2021 story. The crypto exchange FTX launched a lumber futures market.

It’s a cash-settled contract to the monthly reading of the Lumber & Wood Products Category of the Producer Price Index.

In a Twitter DM with Bloomberg, FTX founder Sam Bankman-Fried said putting together the contract took “about 12 hours lead time and about 2 hours of work.” And that requests for it started picking up among users in just the last day. That’s how quickly they were able to launch a new trading product. [Full Article](https://archive.ph/2dfw7)

Pleased to know your thoughts and if this is a corner of the market that may be of interest to the team at Jupiter.

Thanks! :slight_smile:

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Great idea I love it

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Quick question - how do we get a critical mass of grain traders on this platform trading

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If I’m not mistaken Mirror protocol tried this in Terra Classic chain.
Their main issue (before the collapse) was mass adoption and volume. At some point it was mentioned that it was due to the lack of trust in the chain and how oracles could represent those assets.
The other challenge I see here is that at one point or another, the protocol managing this should have enough real assets to backup those tokenized representations.

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Meow Meow Meow Love this

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Opening this to the world with the help of blockchain technology and great ideas would be phenomenal. We need more innovations like this to help change the world.

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I think the biggest challenges are regulatory - definitely would be of interest to many people.

You mentioned FTX - weren’t they effectively the counterparty for any traders of their more exotic markets? And then they would supposedly hedge their risk on market?

Who would be the party who would be willing to act as the counterparty to traders onchain? or would there be a token minting/redemption mechanism like tether? Both not ideal from a decentralization perspective; though token minting/redemption could work (though I would imagine there’s a lot to sort out paperwork wise and for KYC/AML). The other option is oracle settled and having a perp market so purely p2p trades - whilst oracles have their own issues, lot of existing perp markets rely on oracles so no real additional risk there.

The biggest problem I see is that degenerates like crypto because it’s volatile; given that major futures aren’t as volatile as crypto + will likely have thin liquidity initially if launched on chain and won’t allow high lev due to said thin liquidity, I’m concerned that there might be a limited userbase - those who want access to US equities who can’t through a traditional broker.

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Hello dry bulk, from an ex-oil & gas trader >.<

It’s something that I’ve micro-tested in a way through my ex start up. Happy to have a chat and understand how you see this vision being executed, and help if I can :slight_smile:

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