Options trading platform Sparrow recently unveiled a service for cryptocurrency trading, says Fintech News Singapore. The Singapore-based company will extend its services to holders of Bitcoin and Ethereum. Options trading transactions with the firm will be settled through smart contracts.
Backed by LuneX Ventures, the platform seeks to offer certifiable and transparent trading by utilizing smart contracts. The goal of this is to minimize the risks even when handling assets that are known to fluctuate frequently.
LuneX Ventures is a venture capital fund that only invests in blockchain and cryptocurrency assets. It works in cooperation with Golden Gate Ventures, an early-stage venture capital company focusing in Southeast Asia.
Aside from LuneX Ventures, Sparrow is backed by Signum Capital and QCP Capital.
With the help of these backers, Sparrow offers options that based on Ethereum smart contract. These are also released onto Nidus, a Proof of Authority chain.
The company uses a combination of off-chain and on-chain approach to make the trading go smoothly. This method is also intended to make updating the order books much more efficient. Combined with automation and dependable transparency methods, the options trading platform aims to make settlement of assets easier.
According to Bitcoin.com, Sparrow CEO Kenneth Yeo emphasized that options offered by the company are more liquid that over the counter (OTC) options. OTC alternatives are standardized, making them more rigid, says Yeo. He adds that Sparrow Options has ‘more customizable’ contracts, which allows users to ‘enjoy the best of both worlds.’
Interested parties will be able to invest via Sparrow’s TradeBOOST, TradePROTECT and other trading tools and solutions. A transaction fee of 0.1% of the notional value of the contract applies. Users can pay using Bitcoin or Ethereum. However, investors can avail a 50% discount when they choose to use Sparrow Tokens (SPO).