🚀 𝐄𝐱𝐜𝐢𝐭𝐢𝐧𝐠 𝐍𝐞𝐰𝐬: 𝐖𝐞 𝐚𝐫𝐞 𝐭𝐡𝐫𝐢𝐥𝐥𝐞𝐝 𝐭𝐨 𝐚𝐧𝐧𝐨𝐮𝐧𝐜𝐞 𝐭𝐡𝐞 𝐫𝐞𝐥𝐞𝐚𝐬𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐫𝐞𝐩𝐨𝐫𝐭: 𝐃𝐞𝐞𝐩 𝐃𝐢𝐯𝐞 𝐢𝐧𝐭𝐨 𝐄𝐑𝐂-6123: 𝐑𝐞𝐭𝐡𝐢𝐧𝐤𝐢𝐧𝐠 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐃𝐞𝐫𝐢𝐯𝐚𝐭𝐢𝐯𝐞𝐬.
According to the BIS, the over-the-counter (OTC) derivative markets experienced significant growth in 2023, with outstanding derivatives increasing by 8% to reach $667 trillion. This expansion was primarily driven by interest rate derivatives, which grew by 8% year-over-year, and foreign exchange derivatives, which saw a 10% increase.
Meanwhile, managing and settling derivatives contracts in the traditional OTC derivatives market is complex, manual, and inefficient, leading to high operational costs for market participants. Counterparty credit risk is a major concern for both parties in a derivatives contract.
ERC-6123: Rethinking Financial Derivatives is a deep dive into the ERC-6123, an open-source standard for creating and managing derivative contracts on Ethereum and EVM-compatible networks. By leveraging ERC-6123, market participants can benefit from a more streamlined, secure, and efficient approach to derivatives management, addressing many of the challenges present in traditional OTC markets.
A special thanks to the experts who have contributed! Starting with Peter Kohl-Landgraf and Christian Fries from DZ BANK AG, for sharing their expertise and reviewing the paper. But also, Charles "chaals" Nevile, Enterprise Ethereum Alliance, Richard Baker and Ciarán McGonagle from Tokenovate, Yevheniia Broshevan, Valeriia Skorik, Andrew Richardson, Brindrajsinh Chauhan, Sophia Lopez, Kaleido, Stefan Haupt, Malcolm Moreno Beningo and of course, Gwlas Ed and Bradley Stone!
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