Decentralized derivatives platforms are all the rage atop Ethereum lately. And now there’s a new interesting entrant to that sector in Strike Protocol.
Rolled out of stealth mode on Tuesday, May 5th, the alpha derivatives project Strike Protocol unveiled itself as a “decentralized perpetual swaps trading [system] for every asset with Uniswap-inspired Automated Market Makers (AMMs) and a built-in Liquidity Reserve which backs and secures the AMMs.”
That’s a big, and promising, mantle to live up to. And it comes as the DeFi possibilities powered by Ethereum have never been wider. Per the Strike Protocol team, “emerging protocols such as Synthetix and Uniswap have enlightened us on the possibilities of the token model and system design.”
That’s good news for the Strike Protocol system, which stands to win as a project that’s set to go farther than the initiatives that’s come before it. Why is that, you ask?
Because folks are interested in what happens next, and that means that Strike Protocol is a non-trivial option for more than a few users.
A New Kind of Swaps Platform
It’s not that Synthetix and Uniswap aren’t useful in the here and now. They are indeed, respectively. These projects bear tremendous promise in multiple ways, to say the least, and their respective paths’ forward are interesting in more than a few ways. But they can be improved upon, to be sure.
What really counts, then, is that the tech underpinning Synthetix and Uniswap can be improved on and co-opted for building new, powerful things, which is where Strike Protocol comes in.
Who knows how Strike will be received in the years ahead, but there’s a non-trivial chance the project will be hailed favorably beyond the short-term. The advantages are plenty, as the Strike team recently explained of their system’s model:
“Guaranteed Liquidity Provided by AMM …
On Strike, the counter-party of each trade is always our AMMs, which are backed by the assets from stakers. AMMs provide guaranteed on-chain liquidity and solve liquidity issues plagued by most orderbook-style DEXs …
Impermanent Losses for Stakers …
In contrast to popular DeFi protocols that utilize AMMs such as Uniswap and Balancer, the stakers on Strike do not suffer from any impermanent losses caused by price fluctuation …
Minimal Oracle Usage
Strike only uses data feed from our Oracle provider Chainlink once per hour to calculate the funding payment. By implementing this way, we can minimize the risk of Oracle getting attacked …”
Swaps on the Rise
The Strike Protocol is only the latest swaps project to arrive on the Ethereum scene. The biggest related effort prior to that was dYdX’s roll out of a bitcoin perpetual swap offering last month, a first of its kind in Ethereum’s slice of the cryptoeconomy.
“This is a significant step for dYdX and a launch we’ve been building towards for many months … We believe decentralized perpetuals are a big step forward for the industry, and are a natural fit for DeFi,” the dYdX group said at the time.
The Strike Protocol system is still in-progress but should be rolled out in relatively short order. In other words, the project is getting close to fruition but still has a little ways to go yet.
“We’ll release our alpha version on Ethereum testnet soon, and the mainnet is set to be released in the summer of 2020,” the Strike Protocol team has said.
Alas, the arrival will be a significant addition to an Ethereum ecosystem that is already seeing an explosion of varied experiments across the DeFi space in recent weeks. To this end, Strike Protocol is only the latest big project to hit the scene.