Fast-Growing digital asset platform provides further access to crypto derivatives market, giving institutions increased exposure to safe and regulated trades
FalconX, a digital assets and cryptocurrency platform for institutional investors, announced it is the first in the industry to execute a staking-yield swap with Figment, providing institutions exposure and safe access to new forms of yield and investment strategies.
The first of its kind, a staking yield swap is similar to an interest rate swap. It offers an exchange of a fixed interest payment for a floating rate payment. In traditional interest rate swaps, the floating rate typically references a benchmark like SOFR, LIBOR or the Federal Funds Effective Rate, while a staking yield swap floating rate references the staking yield of a proof-of-stake token. The yield received is tracked within a blockchain wallet, has an immutable record and can be viewed by anyone in possession of the public blockchain key.
This announcement comes on the heels of its recent registration as the first and only CTFC registered swaps dealer and crypto-focused Primary Level Members of the International Swaps & Derivatives Association (ISDA), giving institutional investors access to the fast-growing OTC crypto derivatives market to conduct safe and regulated trading.
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“This is a ground-breaking opportunity to give institutional investors well-managed risk exposure and transparency for crypto swap trading,” said FalconX CEO and co-founder Raghu Yarlagadda. “Institutional investors are comfortable with a derivatives-focused investment thesis to maximize alpha on their returns, but no institutional market for crypto derivatives existed in the U.S. until now.”
Through this offering, executed through FalconX subsidiary Solios Inc., FalconX is creating a new category of crypto swap for the underserved derivatives market, enabling clients to earn yield through staking tokens without exposure to the volatility of the token itself and providing safe and regulated trading through a tracked blockchain wallet.
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“We wouldn’t be able to do this without FalconX bringing transparency, access and efficiency to staking yield swaps all under one comprehensive platform,” said Figment CEO and co-founder Lorien Gabel. “Instead of taking multiple steps to execute, FalconX is able to wrap this trading into a singular contract now, with a reported and answerable regulatory framework.”
For the first time in the industry, FalconX is bringing easy, seamless and well-managed trading opportunities to the derivatives market. FalconX structures everything needed so financial institutions don’t need to have separate contacts in place. Now, the company is enabling financial institutions to bring crypto to the next billion users with the trust and security institutional partners expect.
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