Arbitrum-based derivatives protocol Variational has launched its Swaps market, initially offering exposure to gold (XAU) and the Nasdaq 100 index (US100). The swaps feature a funding mechanism based on dollar lending rates, replacing volatile funding rates: long positions pay 4-6% annualized, while shorts earn 2-3%. The market charges zero trading fees and starts with an open interest limit of roughly $10 million per market, with plans to increase it to over $50 million within days. The protocol can support more than $1 billion in open interest. Variational intends to raise limits, add more swaps and perpetual markets, release a trading API, and enable 24/7 liquidity in the coming months.
Variational, a derivatives protocol built on Arbitrum, has announced the launch of its Swaps market, starting with gold (XAU) and the Nasdaq 100 index (US100). The protocol said these swaps function similarly to perpetual futures, offering exposure to underlying assets, but differ in how they source liquidity and charge holding costs.
Instead of using a volatile funding rate, the swaps base their holding cost on dollar borrowing rates. Currently, long positions pay 4% to 6% annualized, while short positions earn 2% to 3% annually. The Swaps market charges no trading fees at all. Each market starts with an open interest limit of around $10 million, which the team plans to raise to over $50 million within a few days. The initial protocol can support more than $1 billion in open interest.
Looking ahead, the team said it will continue raising limits, listing more swaps and perpetual markets, launching a trading API, and working toward 24/7 liquidity in the coming months.
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