Together with the cryptocurrency exchange FTX, Paradigm has announced the start of spread trading.
In a blog post on Friday, Paradigm said that FTX users would be able to use “one-click” trading with “no legging risk” for the spread between spot, perpetual, and fixed maturity futures on Bitcoin (BTC), Ether (ETH), Solana (SOL), Avalanche (AVAX), ApeCoin (APE), Dogecoin (DOGE), Chainlink (LINK), and Litecoin (LTC) (LTC).
FTX will make sure that the trades are “atomically executed and cleared on both legs.”
Anand Gomes, the CEO of Paradigm, said that the goal of the deal was to attract new crypto investors who were interested in cash and carry trades, which involve buying crypto on the spot market and using futures instruments on FTX.
Gomes also said that the rollout could lead to the release of new products “in the future.”
The company said that using atomic execution for both legs of spreads trading was “structurally less risky” than using a traditional exchange. This meant that market makers could “quote much tighter prices and in significantly larger sizes.”
Paradigm says that if you do two separate outright trades, the fees will be 50 percent less than that.
Make money through “cash and carry” trades and “funding rate farming”
Investors who want to make money can now easily do “cash and carry” trades using FTX’s spot and futures instruments for a variety of currencies and futures expiration dates. Traders can also get funding rates for perpetuals with just one click. These trades can now be made through Paradigm, and the atomic execution of both legs is guaranteed. There is no delta risk with these trades.
When you trade spreads on Paradigm, you pay 50 percent less in fees.
Spreads that are done on Paradigm and settled on FTX will cost 50 percent less in fees than two separate outright trades. Both Paradigm and FTX clients have never paid less to roll their positions or take a view on the yield curve.
In 2019, Paradigm worked with Deribit, an exchange for crypto derivatives, to launch a solution for block trading.
