There’s much work still to be done to help expand the capabilities of decentralized derivative platforms. Up until recently, users had a difficult time finding liquidity to trade mid-cap and long-tail assets – especially in perceptual markets.
The isolation of these platforms has driven companies to expand their understanding of decentralized derivative platforms, and in a recent landmark funding round, led by crypto VC Pantera Capital, the Maverick Protocol, a bootstrap permissionless derivatives protocol aims to strategically boost the development of the Automated Liquidity Placement (ALP) technology.
In a statement released on Tuesday, 15 February, the company announced a $8 million funding round. The statement outlined how the company is now seeking innovative development to fastrack improvement of ALP technology, and an open asset listing model.
The need for improved protocol models has been an ongoing obstacle for users, while the industry of decentralized finance has expanded beyond current predictions. This has left a gap in the market for protocol models, like that of the Maverick Protocol, to build solution-based mechanisms which will allow users more access to liquidity assets.
Reviewing an October 2020 statement published by the U.S. Securities and Exchange Commission (SEC), funds using derivatives have become an increasing problem for regulating government entities.
Challenges to resolve ongoing issues have left various public and private entities to take leverage, compiling research to develop risk models that are now criticized as ‘an unreliable gauge of derivatives risk.’
Even with current protocols, there has been a growing demand for collateral, as more market users and participants enter each year.
The current sentiment now lies open, creating an opportunity for companies and VCs to strategically design a protocol that will help increase the value of derivatives pricing in the market.
With the success of their recent funding round, Maverick Protocol developers, and company executives are aiming to resolve current issues within the next few months.
The changing protocol
Without ignoring the importance of innovation, we need to backtrack to our current position. Users seeking valuable crypto assets are faced with the challenge to obtain liquidity which will enable them to trade mid-cap and long-tail assets.
The current decentralized exchanges have capped users to around 30 trading pairs, perhaps even less on DEXs. With hundreds of pairs available to trade on centralized exchanges, developers at Maverick have caught the eye of an opportunity that will allow derivatives to grow on DEXs.
If their innovation reaches decentralized exchanges, the Maverick Protocol will be able to increase the number of derivative pairs, allowing more freedom for asset listing on their platform.
Permissionless Derivatives Trading
Platforms are struggling to keep up with growing demand, and develop deviceful protocols that can handle mass adoption. Strategic partnerships with various VCs, and investors are now required to solve an age-old issue.
Commentary shared by Maverick co-founder, and CEO, Alvin Xu, after Tuesday’s funding round places the need for more contemporary solutions.
“Perpetual markets still lack the ability to quickly list new assets due to the intensive work required to spin up a sustainable market. With Maverick, we are here to change that paradigm by leveraging ALP (Automated Liquidity Placement). Markets can now be created by the community with way less capital, but still offer a great experience to traders.”
The scattering funds raised will bring Maverick closer to launching its main net protocol within 2022.
Both Xu and Pantera Capital co-CIO Joey Krug are excited to scale up liquidity provisions, which they hope will help advance the DeFi industry.
With the Maverick Protocol, users will hopefully be able to lower their risks, staking any ERC-20 supported token as collateral, while the company seeks to improve its machine learning and business team.
The recent development within the DeFi industry and the need for more advanced opportunities will put the Maverick Protocol under a microscopic view, as users, and investors hope it will enable decentralized users to access an open listing derivatives platform, without limitation.