Rails taps Stellar to launch onchain vaults for institutional derivatives liquidity

Rails has partnered with the Stellar blockchain to introduce on-chain vaults aimed at enhancing liquidity for institutional derivatives. This initiative is designed to leverage Stellar's smart contract capabilities alongside on-chain proofs and segregated collateral, which are expected to make the trading of high-speed perpetual contracts more appealing to institutional investors.

The integration of Stellar's technology allows Rails to create a framework that addresses some of the key concerns that institutions have regarding the volatility and risks associated with derivatives trading. By implementing on-chain vaults, Rails aims to ensure that collateral is managed in a more secure and transparent manner, which is crucial for institutional adoption.

High-speed perpetual contracts, which allow traders to hold positions indefinitely without an expiration date, have gained popularity in the crypto market. However, their complexity and the inherent risks have made them less attractive to traditional financial institutions. Rails’ approach, utilizing Stellar’s infrastructure, could significantly mitigate these risks by providing real-time proofs of collateral and enabling more efficient transaction processes.

The collaboration with Stellar also underscores a growing trend within the cryptocurrency sector, where companies are seeking to bridge the gap between decentralized finance (DeFi) and traditional financial systems. By making perpetual contracts more accessible and trustworthy for institutional players, Rails is positioning itself at the forefront of this evolution, potentially attracting a new wave of institutional capital into the crypto space.

Overall, this strategic move by Rails is seen as a significant step towards integrating sophisticated financial products within the blockchain ecosystem, thus paving the way for enhanced participation from institutional investors who have previously been hesitant to engage with the cryptocurrency market.

Key Takeaways

Rails is collaborating with Stellar to create on-chain vaults aimed at improving liquidity for institutional derivatives.
The use of smart contracts and segregated collateral is intended to increase the appeal of high-speed perpetual contracts to institutional investors.
This partnership reflects a broader trend of integrating DeFi solutions with traditional financial markets, potentially attracting new institutional investments.
Rails’ initiative aims to address concerns over volatility and risk, which have hindered institutional participation in the crypto derivatives market.

This article was inspired by reporting from CoinTelegraph. · Report an issue