The recent collaboration will give Friktion access to a global network of 700 counterparties, representing 30 percent of all global crypto options flows.
Friktion X Paradigm: Instituitional Liquidity
Friktion partners with Paradigm, a leading institutional options liquidity network for traders to bring institutional liquidity to Decentralized finance (DeFi).
Friktion recently announced the partnership on Twitter and, alongside an accompanying Medium article, explaining that the partnership would give them access to a global network of 700 counterparties, representing 30 percent of all global crypto options flows. Additionally, the DeFi portfolio management protocol notes that the move will allow Friktion to provide efficient price discovery and execution for its auctions while preserving the non-custodial DeFi guarantees that its users value. Uddhav Marwaha, the CEO of Friktion Labs, further adds:
“Our partnership with Paradigm will further unlock efficient price discovery and execution for Friktion auctions while preserving the DeFi guarantees we value. Bringing the largest CeFi options liquidity network to Solana is the first step in our plan to scale liquidity across venues for Friktion. We’re proud to be working with Anand and his team, who have been building since the earliest days of crypto options.”
According to Friktion, Friction Volts are the fundamental building blocks of DeFi portfolios, as they facilitate risk-adjusted return generation across market cycles. Volts’ underlying components must have a deep, liquid market for this to happen. Through the expansion of Volt#04(Basis Yield, a delta-neutral long/short basis strategy), Friktion will gain access to Paradigm’s perpetuals marketplace in order to deliver an innovative DeFI/CeFI integration, thus improving liquidity.
“The DeFi portfolio manager built to perform across market cycles – is integrating with Paradigm – the leading options liquidity network for traders,” Jump Crypto mentions in a recent Twitter thread. “This marks the largest DeFi <> CeFi integration to date and is a big win-win for the entire DeFi community. Building together is building better.”
Two Phases of the Partnership
As reported in an article from Paradigm’s blog on May 10, there will be two phases of this strategic partnership which are as follows:
Phase 1 of this partnership will entail Paradigm powering Volt#01 and #02: covered call and collateralized put option auctions, leveraging crypto’s largest institutional liquidity network and automated workflows to streamline and optimize the Volt auction process.
Phase 2 of Paradigm and Friktion collaboration will focus on improving liquidity and execution of Volt#04: Basis Yield, an approach to perpetual funding rates that uses delta-neutral strategies.
“We are excited to collaborate with the Friktion team as they continue to build out key DeFi primitives in the Solana ecosystem, “ says Anand Gomes, CEO of Paradigm. “Friktion has been at the cutting edge of innovation since their launch, and we are delighted to help support their incredible pace of product innovation with our best in class liquidity and automated RFQ workflows.”
As per Friktion, they have deeply explored auction mechanism design and optimization as they built out Channel RFQ, the auction engine behind Friktion, which has traded nearly $2bn of options volume to date. By using Paradigm, Friktion will maximize the yields available on its products for its clients and facilitate market maker participation because Paradigm’s user interface is similar to that of structured product auctions on other chains.
What is Paradigm:
Paradigm is a global liquidity network specializing in crypto derivatives and protocols connecting CeFi and DeFi ecosystems. The platform enables traders and crypto protocols to gain unified access to multi-asset, multi-protocol liquidity on demand without sacrificing execution preferences, costs, or immediacy.
With over 700 institutional clients trading over $10B per month, Paradigm has the largest network of institutional counterparties in crypto, including Hedge Funds, OTC Desks, Lenders, Structured Product Issuers, Market Makers, and prominent Family Offices.
Learn more about Paradigm:
What is Friktion:
Friktion is a DeFi portfolio management protocol that runs on Solana and is designed to perform across market cycles. It is an asset management tool that automatically allows users to maximize returns while mitigating risks by employing automated ‘Volts’ strategies.
Where to find Friktion:
Source : web3wire.news