The DEX Ostium, focused on RWA, recently launched a points system to attract players to trade or deposit into liquidity pools for earnings, with transaction fee revenue reaching 1.6 million USD in April. Users interested in TradFi might also take advantage of this platform to hedge using stablecoins without needing to withdraw to the real world, perhaps against the recently soaring gold prices? Or perhaps against safe-haven currencies like the Euro or Yen?
What is Ostium?
Ostium is a trading platform based on Ethereum L2, focused on bringing real-world assets onto the chain for trading, including major indices, commodities, foreign exchange, etc., providing transparent and non-custodial trading services with leverage of up to 200x. Investors and partners include GSR, Coinbase, alchemy, and TWO SIGMA.
According to Dune's data, Ostium's cumulative trading volume is 5.74 billion USD, with 7,050 users and total transaction fees reaching 2.29 million USD.
In terms of trading volume, apart from Bitcoin and Ethereum taking the first and second positions, the Euro and Japanese Yen also have decent trading volumes, accounting for 12% and 11% respectively. Additionally, Gold and the S&P 500 index also have trading volumes of around 10%, indicating that many traders are using this platform to trade traditional financial products.
The shared liquidity layer design of Ostium
Ostium does not use a traditional central limit order book, but instead relies on a so-called shared liquidity layer (SLL) for support. The so-called SSL is composed of a liquidity buffer (Liquidity Buffer) and a market making vault (Market Making Vault), to reduce the situation where liquidity providers offer direct liquidity to traders.
Because the main feature of its model is the introduction of quotes from traditional finance, with a liquidity buffer pool acting as the counterparty, and when the buffer pool cannot provide liquidity, the market-making treasury extends the liquidity. In return, the market-making treasury can receive settlement rewards and trading fees. Users' funds wishing to participate as liquidity providers can only be deposited and withdrawn through the market-making treasury, avoiding the movement of funds in and out that would cause liquidity in the buffer.
Is there no risk in dealing with users?
Since the Ostium system uses a single reference price for each trading asset, which is derived from real-world oracle prices, this is equivalent to trading against the user. When users make significant profits, it can potentially lead to losses in the liquidity buffer.
Ostium's research report published last year pointed out that because every trading pair on the platform is priced in US dollars, by using a diverse asset portfolio and long-short combinations, bringing all trades into the same liquidity buffer can have a risk diversification effect.
The report emphasizes the benefits of integrating real-world assets. It provides a new perspective on quantifying and managing risks within these complex systems through the development of imbalance scoring. The simulations and data analyses in the report indicate that incorporating risk-weighted assets can significantly reduce risk, lower the mean and variance of imbalance scores, and highlight the value of synthetic risk-weighted assets in diversifying and stabilizing AMM portfolios.
Liquidity providers deposit their capital into the market-making vault to mint OLP tokens, representing their share in the vault. Additionally, they earn trading fee rewards for assuming potential delta risk, with the current annualized return rate at 9.9%. The observed Collaterization Ratio is 98.73%, below 100%, indicating that LP providers still bear the risk associated with users' trades.
TALKCHAIN introduces how to obtain airdrop points
The on-chain analysis team TALKCHAIN also introduced ways to earn points in a recent video, suggesting that everyone should trade for points rather than risk being an LP provider. There may also be opportunities to receive airdrops. Users interested in TradFi might also use this platform without having to withdraw funds to the real world, using stablecoin for hedging, perhaps against the recently soaring gold? Or hedging currencies like the euro or yen?
This article discusses the RWA on-chain platform Ostium, which uses stablecoins for hedging real-world assets while also earning airdrops. It first appeared in Chain News ABMedia.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
The RWA on-chain platform Ostium uses stablecoins to hedge real-world assets while earning airdrops.
The DEX Ostium, focused on RWA, recently launched a points system to attract players to trade or deposit into liquidity pools for earnings, with transaction fee revenue reaching 1.6 million USD in April. Users interested in TradFi might also take advantage of this platform to hedge using stablecoins without needing to withdraw to the real world, perhaps against the recently soaring gold prices? Or perhaps against safe-haven currencies like the Euro or Yen?
What is Ostium?
Ostium is a trading platform based on Ethereum L2, focused on bringing real-world assets onto the chain for trading, including major indices, commodities, foreign exchange, etc., providing transparent and non-custodial trading services with leverage of up to 200x. Investors and partners include GSR, Coinbase, alchemy, and TWO SIGMA.
According to Dune's data, Ostium's cumulative trading volume is 5.74 billion USD, with 7,050 users and total transaction fees reaching 2.29 million USD.
In terms of trading volume, apart from Bitcoin and Ethereum taking the first and second positions, the Euro and Japanese Yen also have decent trading volumes, accounting for 12% and 11% respectively. Additionally, Gold and the S&P 500 index also have trading volumes of around 10%, indicating that many traders are using this platform to trade traditional financial products.
The shared liquidity layer design of Ostium
Ostium does not use a traditional central limit order book, but instead relies on a so-called shared liquidity layer (SLL) for support. The so-called SSL is composed of a liquidity buffer (Liquidity Buffer) and a market making vault (Market Making Vault), to reduce the situation where liquidity providers offer direct liquidity to traders.
Because the main feature of its model is the introduction of quotes from traditional finance, with a liquidity buffer pool acting as the counterparty, and when the buffer pool cannot provide liquidity, the market-making treasury extends the liquidity. In return, the market-making treasury can receive settlement rewards and trading fees. Users' funds wishing to participate as liquidity providers can only be deposited and withdrawn through the market-making treasury, avoiding the movement of funds in and out that would cause liquidity in the buffer.
Is there no risk in dealing with users?
Since the Ostium system uses a single reference price for each trading asset, which is derived from real-world oracle prices, this is equivalent to trading against the user. When users make significant profits, it can potentially lead to losses in the liquidity buffer.
Ostium's research report published last year pointed out that because every trading pair on the platform is priced in US dollars, by using a diverse asset portfolio and long-short combinations, bringing all trades into the same liquidity buffer can have a risk diversification effect.
The report emphasizes the benefits of integrating real-world assets. It provides a new perspective on quantifying and managing risks within these complex systems through the development of imbalance scoring. The simulations and data analyses in the report indicate that incorporating risk-weighted assets can significantly reduce risk, lower the mean and variance of imbalance scores, and highlight the value of synthetic risk-weighted assets in diversifying and stabilizing AMM portfolios.
Liquidity providers deposit their capital into the market-making vault to mint OLP tokens, representing their share in the vault. Additionally, they earn trading fee rewards for assuming potential delta risk, with the current annualized return rate at 9.9%. The observed Collaterization Ratio is 98.73%, below 100%, indicating that LP providers still bear the risk associated with users' trades.
TALKCHAIN introduces how to obtain airdrop points
The on-chain analysis team TALKCHAIN also introduced ways to earn points in a recent video, suggesting that everyone should trade for points rather than risk being an LP provider. There may also be opportunities to receive airdrops. Users interested in TradFi might also use this platform without having to withdraw funds to the real world, using stablecoin for hedging, perhaps against the recently soaring gold? Or hedging currencies like the euro or yen?
This article discusses the RWA on-chain platform Ostium, which uses stablecoins for hedging real-world assets while also earning airdrops. It first appeared in Chain News ABMedia.