Blockchain data company Arkham Intelligence is reportedly looking to put to sea a crypto derivatives exchange in November.
The firm is backed by several stalwarts and companies spanning the crypto and tech industry, including Sam Altman, Binance, Bedrock, and Draper Associates.
Arkham is also shifting its operations from London and New York to Punta Cana in the Dominican Republic. This venue will serve as the start-up's new base camp.
Arkham is looking to operate the platform via a Dominican Republic free-trade zone license. It is currently in the midst of securing the same.
That being said, it should be noted that the Dominican Republic’s FTZs offer tax exemptions and fiscal benefits to businesses.
Arkham has been internally sharpening the tech side of its sword over the past year. It has also been in discussions with investors in the Middle East to raise as much as $100 million to expand the venture.
A recent report pointed out that,
“The exchange will be aimed at retail investors and seek to compete with platforms such as the world’s largest crypto exchange Binance. The new venue will not be open to US investors.”
Arkham’s data platform has about 880k monthly active users. The start-up reportedly hopes that these users will give it a “leg up” in integrating customers to the exchange.
State of the Derivatives Market
By launching a derivatives platform, Arkham is looking to bridge the gaps. Even though derivatives trading is curently dominated by Binance, its market share has dropped to its lowest in four years.
Furthermore, according to data from CCData, derivatives trading activity on CEXes surpassed the $3 trillion mark in September. This translates to ~71% of the total crypto volume.
Despite the current stagnant market conditions, market players are tampering with leverage. The ELR for Bitcoin is currently hovering around its YTD high, indicating that more investors are taking high leverage risks while indulging with derivatives trades.
