The cryptocurrency and DeFi industries are known for their ongoing volatility. Sharp price drops and increases create opportunities to make money. Qilin goes one step further by providing active exposure to the price swings of any asset.
Enhancing Volatility as A Tool
The vast majority of cryptocurrencies are only known for their volatility. Although that creates many money-making opportunities, it also scares off a fair few people on the fence about investing. While the volatile aspect of crypto assets can be scary, it is also a tool to wield by those brave enough to explore the options on the table. Harnessing volatility to one’s benefit can prove beneficial, as this industry is one of the only ones capable of providing such benefits.
As the decentralized finance industry grows, the appeal of and access to unique opportunities becomes crucial as Qilin intends to create new opportunities through market volatility. More specifically, it is a decentralized volatility protocol that lets suers long any asset’s volatility over time. Exploring long or short volatility is an unusual option in the cryptocurrency industry, but it can prove useful.
What is important for all DeFi solutions is how well they can handle significant blockchains’ scaling issues. Qilin is confident it has a 99.99% fee reduction over competitors and 50 times the capital efficiency. Bold statements to live up to, as users will scrutinize projects putting out such lofty features. With the mainnet launched on Ethereum in Q2 2021 and migration to layer-two solutions, later on, there are certain milestones to look forward to.
As a decentralized volatility protocol, Qilin intends to reduce the risk of liquidity providers through Rebase Share. Additionally, its elastic liquidity supply range can help increase capital utilization, a very important aspect when dealing with market volatility and leveraged positions. Powered by a comprehensive liquidation engine, the team’s approach to derivatives is unique and can greatly appeal to the right type of users.
A Successful Initial Round For Qilin
A project on the scale of Qilin introduces a lot of opportunities but will also require careful development. Funding that development will not come easy, yet the team has raised $800,000 through its initial funding round. Contributions came from Fundamental labs, Multicoin Capital, Yuanyuzhou Ventures, and others. All investors see merit in this unusual approach to derivatives and how it might impact the DeFi industry.
With the help of this funding round, the Qilin team can explore the possibilities regarding the use of volatility as a trading instrument. The team deems volatility more important than altcoin liquidity, which is where its native mechanism comes into play. That mechanism offers decentralized on-chain risk control and dynamic liquidity. Both aspects will pave the way for permission-free on-chain contracts for altcoins.
Closing Thoughts
Until now, people sought exposure to volatility by using derivatives in the traditional sense. Going long or short on particular markets – with or without leverage – can yield significant results. However, it also requires using centralized platforms and service providers, which isn’t ideal when seeking exposure to decentralized assets and their market performance. The decentralization of the derivatives market is a big undertaking.
By completing an initial investment round for $800,000, there seems to be a degree of institutional interest in what this project wants to bring to the table. Introducing a decentralized volatility protocol can pave the way for broader cryptocurrency adoption by mainstream consumers. It will also bring much-needed competition to centralized derivatives service providers, as derivatives remain an appealing option for anyone looking to gain exposure to volatile crypto assets.
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