DeFi project offers new way to trade the entire $1 trillion crypto market

Startups • January 9, 2021, 4:22PM EST
UPDATED: January 9, 2021, 4:23PM EST
The Block

A decentralized finance (DeFi) project is gearing up to debut a token that aims to allow users to capture the value of the entire $1 trillion cryptocurrency market. 

Led by Ethereum 2.0 developer and Prysmatic Labs founder Preston Van Loon and Joe Sticco, Cryptex is set to launch the mainnet of its token TCAP this quarter. Already, the firm has lined up 500 users for its testnet, including a number of liquidity providers in the US.

In a sense, the project is looking to capitalize on a wider trend underway in the digital asset space: offering a product that provides exposure to a wide-range of crypto-assets. TCAP captures the value of more than 2,000 tokens and moves in line with the broader market.

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S&P Global and Cboe Global Markets are currently setting the foundation for new index products that would give investors exposure to the market. Cryptex says its offering is uniquely decentralized, given that the pricing data that informs the price of the token is derived from Chainlink oracles. Leveraging these oracles, Cryptex is able to aggregate data across several data providers into one smart contract.

"The beauty of working with Chainlink is they provide us with decentralized total crypto market cap data, which, via the TCAP smart contract, we can then algorithmically match up on chain to cross-asset collateral for creating not only our initial TCAP token but a forthcoming lineup of fully decentralized data-backed financial tokens for the entire ecosystem," commented Sticco. 

Looking to the future, the project plans to roll out a slew of tokens tied to metrics like bitcoin's market dominance, 24-hour trading volumes, ETH hash rate, and ETH gas. Trading desks that have expressed interest in trading the token see an arbitrage opportunity.

"Minting TCAP will provide arbitrage opportunities to the UNI pools depending on the price of TCAP there, which as you know will also have a supply and demand element to it," Sticco added.

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Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].

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