CoinMarketCap takes a deep dive into an emerging project for crypto derivatives trading.
Exchanges are a staple in the cryptocurrency landscape and are generally one of the first ports of call for those first making their foray into the industry. They’re also heavily used by professional traders and institutions looking to trade some in what many consider to be one of the fastest developing financial landscapes.
Globe, a new cryptocurrency derivatives trading platform, looks set to expand on this landscape by introducing a range of novel futures contracts and features that help set it apart from the competition.
What Is Globe (GDT)?
Globe is a cryptocurrency exchange that offers a variety of perpetual futures products that allow users to speculate on the price of an underlying asset without actually trading it directly.
Globe is set to offer a variety of in-demand and unique perpetual futures contracts, and provides a high-speed trading interface that is built to provide a smooth trading experience even while under massive load.
The Globe Derivative Token (GDT) is the native utility token of the Globe exchange. The GDT token can be used for a variety of purposes, including fee discounts; fee payments; margin for trading; and as a booster for Globe's rewards program — which sees users rewarded in Bitcoin (XBT) for completing various tasks.
The platform is scheduled to launch in May, following its initial DEX offering (IDO) via PAID Network’s Ignition platform and a final public sale. It will initially support trading for several futures products right off the bat. These will include XBT/USD, ETH/USD, UNISWAP/USD and XBT/VIX — the latter of which is Bitcoin's volatility index.
The executive team behind Globe is composed of technologist and former lead quant at Grove Capital Management James West and Shaun Ng — an experienced trader, Y Combinator alumni, and former theoretical physicist with a strong development background.
How Does Globe Work?
As a derivatives exchange that aims to pioneer new trading products like VIX futures, Globe is designed to make futures trading not only more accessible to casual traders, but also institutions.
To cater to these diverse demographics, Globe looks set to offer a range of unique, highly sought-after futures contracts.
All contracts on Globe are a type of derivative known as a perpetual futures contract, which essentially means they have no expiration date and the longs and shorts pay each other at a fixed funding interval based on the market conditions.
Like most cryptocurrency exchanges, Globe allows users to trade through a regular GUI-based trading interface — this is suitable for users employing manual trading strategies or trading casually. On the other hand, it also supports algorithmic, high-frequency and institutional traders through its WebSocket API — allowing these users to easily interface with Globe through their external software.
The GDT token lies at the heart of the Globe platform and is woven into most of its features. Arguably the most important feature for traders is the fee discount it provides. The more GDT tokens held, the higher the discount, and the better access to other as yet unannounced benefits. Globe will also be implementing a burn system, which sees the exchange buy GDT from the open market using 30% of its profits before burning it to reduce the supply.
The full launch of the platform is currently expected for May 10, 2021, after which users will be able to begin depositing BTC to trade its various futures contracts.
What Makes Globe Unique?
Exchanges are constantly buckling under the extreme load that can occur during moments of peak activity. This has been a persistent issue throughout recent history, particularly for those that find themselves liquidated during the downtime or unable to capitalize on an opportunity since their platform of choice is overloaded.
Globe tackles this problem from the ground up by combining industry best practices with a range of in-house innovations to produce a platform that reportedly benchmarks 5x faster than NASDAQ in latency, and is capable of handling around 15 million messages per second, and 100k+ simultaneous API connections.
These capabilities ensure its matching engine can continue processing trades even if the exchange sees a sudden or sustained increase in load — ensuring traders maintain a consistent experience at all times.
In addition to its resilience and high-speed matching engine, Globe also claims the following unique features:
Novel ProductsGlobe is designed to address one of the major stopping points of existing cryptocurrency derivatives exchanges — a lack of unique or novel futures products.
The team behind the exchange plans to position Globe as a pioneer in the derivatives space, with sports futures, DeFi options and a range of novel products already in the pipeline. Globe’s flagship product is its BTCVIX futures contract, which allows traders to easily speculate on the direction of Bitcoin volatility.
Custom Risk EnginesBesides its load balancing capabilities, Globe will make use of custom-developed risk engines that will help make the markets safer to trade by minimizing the risk of liquidations due to adverse market events. Globe is designed to protect the solvency of its customers wherever possible.
Exchange NFTs
Globe recently unveiled what it describes as the "world's first exchange NFTs". These are NFTs that represent the different animals of the Chinese zodiac calendar, including the Ox, Dragon, Tiger, etc. These will be interwoven with the Globe ecosystem and will provide holders with “special utility”, beyond being simply rare or potentially valuable.
Renowned BackersGlobe is backed and funded by a number of renowned incubators and VC funds, including Y Combinator, Draper Dragon, Pantera Capital, Block Dream Fund and more. The platform shares many of the same early backers as Coinbase.
What Are Crypto Derivatives?
Globe falls into a class of cryptocurrency exchange known as a “derivatives” exchange. These are different from the more common “spot” trading platforms, in that rather than directly trading one cryptocurrency for another, users instead trade so-called derivatives contracts, which derive their performance from an underlying asset, index or other property of interest.
Generally, derivatives can be divided into three main types: futures, options and swaps. Globe is primarily a perpetual futures exchange, but may eventually incorporate options and spot trading functionality in future.
To learn more about derivatives and their place in the crypto economy, check out our recent piece on the subject — here.
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