BIT said that TON options trading is available on its platform now, while Paradigm is planning to go live with the token in the coming weeks, thanks to a close collaboration with technology partners Darley Technologies and DWF Labs, which are providing market making services. It’s a big boost overall to the nascent options trading market in crypto, which, until now, has only supported the most well-known tokens - Bitcoin and Ethereum.
The move is actually a fairly big deal because options trading is almost completely unknown in the crypto world. The vast majority of crypto exchanges support what’s known as “spot trading”, which is where users simply exchange token pairs, such as BTC/ETH, BTC/USDC, ETH/USDT etc.
Options trading is a completely different ballgame and many traders believe it’s a much safer way of hedging against the price movements of different assets. Rather than just swapping tokens directly, options trading allows traders to purchase a contract that gives them the right to buy or sell a token at a specific price, either before or when the contract expires. But there’s no obligation to execute the contract, so traders only have to do so when the price is advantageous to them. Alternatively they can let the contract expire without exercising their “option” and they’ll only lose the fee paid to take out the contract in the first place.
It’s a very different way of trading than most crypto traders are used to. Last year, options trading accounted for just 2% of the overall crypto trading market. Spot trading is far more dominant, but BIT and Paradigm believe it has the potential to one day surpass that of spot trading, and say that’s why they're adding support for TON. Their belief stems from the fact that in other markets, options is actually far more lucrative. The stock options and FOREX options markets for example, are said to be around 35-times larger than the spot markets. So it’s logical to assume that if crypto options supports a greater number of assets, the market can grow considerably.
BIT and Paradigm selected TON as the third supported cryptocurrency for their options markets due to its incredible potential. It’s one of the fastest-growing cryptocurrencies, currently ranked 23rd overall by market cap, with its value rising almost 200% in the last six months. TON is the native token of The Open Network, a layer-1 blockchain platform that supports a growing and extensive ecosystem of decentralized applications.
TON was originally developed by the creators of the Telegram messaging app, only to be abandoned after it had problems with the U.S. SEC. Since then, the project has been picked up by the open-source community and is now led by the TON Foundation. It’s claimed to be one of the fastest and most scalable blockchain networks around, with the ability to support millions of transactions per second. DWF Labs is one of its main backers, providing services around market creation and token development. It also supports TON with significant funding, having already donated $10 million that will be used to fund the development of projects within its ecosystem.
Darley Technologies played an instrumental role in bringing TON options trading to BIT and Paradigm. As the exchanges noted in a press release, the addition of any altcoin to the options trading market is a big challenge that comes with unique market risk management requirements. With its supporting infrastructure, Darley intends to democratize access to altcoin options trading, beginning with TON.
“We are thrilled to be working with Darley Technologies and DWF to offer TON options,” BIT co-founder and COO Lan said. “With the advent of dollar-margined products and the addition of various altcoin options, the options market has enormous growth potential. BIT and our trusted partners are devoted to increasing the accessibility of crypto options for both institutional and retail traders.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.