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Blockchain platform Velocity has revealed the first DLT smart contract on price feeds, launching an interactive demo of the platform in the process. Using both blockchain and Ethereum technology, the system makes derivates “accessible and secure”.

Users will be able to enter a collar option using Ethereum smart contract technology, decentralising the settlement process and eliminating middle men. Each side of the deal buys a contract by sending ETH to an Ethereum address and once accepted by the network the contract will deliver a price and run it for five blocks.

“Velocity enables participants to hold leveraged positions on the movements of a price feed. Customers can buy and hold collar options contracts which are issued and settled autonomously,” writes the firm in a white paper. “Collar options are an options contract with a cap on its maximum payout. Capping payouts allows the system to remain solvent and fully capitalised at all times.”

“The OTC derivatives market is worth $16 trillion in the U.S. alone, making derivatives integral to today’s financial landscape, in everything from insurance to portfolio management,” says Vignesh Sundaresan, Chief Architect at Velocity. “Velocity provides advanced yet approachable blockchain technology to support cryptocurrency’s trend towards margin trading, and to further adoption of smart contracts on the blockchain.”

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by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: alexanderh@ibsintelligence.com
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