SynFutures, which includes several cryptocurrency developers and Wall Street specialists, offers hashrate futures to the market. This derivative contains risk factors that affect the profitability of Bitcoin mining. This protocol is now in its final stages of testing.
During the development of the product, SynFutures drew attention to the classic product of the financial market – interest rate futures. They used to speculate or hedge based on how interest rates change on exchanges.
The team decided to create their own futures. They represent the overall hash rate mining reward for mining a Bitcoin block.
This design allows the use of a futures contract in order to perfectly hedge changes in the difficulty of mining cryptocurrencies. This will allow miners to use this product, which precisely targets the difficulty of mining. And is critical to the exact amount of BTC to hedged with BTC / USD / futures.
Thus, it is not enough, excessive hedging is completely eliminated. At least that’s what the SynFutures team says. Miners now have the ability to hedge with derivatives; issue short hashrate futures to get insurance against the risks of increased mining difficulty and record the number of new Bitcoins they mined.
Miners can also hedge short BTC / USD futures with the Bitcoin amount implied by the hash rate futures higher using derivatives in order to fix the proceeds.
In addition, miners can also issue long-term futures for electricity. In order to determine its future value and adjust their plans.
“No one has ever created a product like this calculated using hash rates and computational complexity. With Hash Rate Futures, mining companies will have peace of mind with their profits”, CEO of SynFutures said.
Team plans for the future
The team plans to further improve the infrastructure of decentralized futures for hash rates. So that each miner can use them to minimize the risks from changing the complexity of cryptocurrency mining.
According to the developers, this should accelerate the development of the entire cryptocurrency mining infrastructure. Reduce risks, reduce the influence of large players in the digital coin mining market, and increase miners’ profits. In this SynFutures is supported by funds such as Polychain Capital, Bybit, Wintermute, and other companies.
Why is SynFutures gaining popularity?
As DeFi continues to gain traction, investors are looking for niche spaces in the industry. SynFutures said it will focus its entire platform on derivatives, which are financial instruments such as futures contracts or options.
Singapore-based company SynFutures wants to remove barriers in the derivatives market for small investors for a variety of products, including large cryptocurrencies, altcoins, stocks, metals and indices.
“We are committed to making the ecosystem comfortable for the average investor by developing a free and open market for derivatives trading”, said Rachel Lin, CEO of SynFutures.
SynFutures users are currently in closed alpha. But the company plans to open the platform to all users.
Note that in a Series A funding round led by Polychain Capital, the Decentralized Financial Instruments (DeFi) derivative exchange SynFutures raised $ 14 million.