Set to Launch Global Benchmark for Ether
Plan to Introduce Infrastructure and Tools for Broad Adoption by Institutional Community
ConsenSys, the blockchain venture production studio, and trueDigital Holdings LLC (“TDH”), a trueEX affiliate, have formed a partnership to develop an institutional framework and products for the trading and hedging of digital assets. The two firms will initially create a broadly targeted reference rate and indices for Ether (“ETH”), the Ethereum-based cryptofuel (digital currency).
This partnership follows trueEX’s announcement that it intends to launch a regulated derivatives marketplace for digital assets on trueEX’s SEF under the “trueDigital” brand. It will list non-deliverable forwards (“NDFs”) on Bitcoin pursuant to a licensing and services agreement with trueDigital, pending CFTC review.
The crypto-commodity Ether is one of the largest digital assets by value, with an approximate market capitalization of $85B. Ether’s market capitalization was $700M at the start of 2017.
The rise in price of Ether reflects the demand caused by the dramatic growth in usage of the Ethereum network platform for decentralized applications. On January 1 2017, the network processed 38,730 transactions and one year later is has been processing over 1.1 million transactions per day. Total requests across the entire Ethereum networks (transaction writes plus data reads) exceeded 4.5B on certain days in December 2017.
"We are believers in the secular trend of the adoption of digital assets by the institutional marketplace. As such, we are thrilled to be partnering with TDH and Sunil Hirani, who has a long-term track record of establishing successful platforms in derivatives, processing, clearing and enterprise grade blockchain solutions,"" said Joseph Lubin, co-founder of the Ethereum Project and founder of ConsenSys.
"Institutional investors are ready for better ways to gain exposure to and hedge these increasingly important digital assets, and I cannot think of anyone or any firm better suited to help us navigate the Ethereum Blockchain and ecosystem than Joseph Lubin and ConsenSys,"" said Sunil Hirani, founder of trueEX and trueDigital Holdings.
"ConsenSys will leverage its thought leadership in blockchain and our team's experience in asset management and financial services to help drive a much-needed, institutional-grade infrastructure. Our partnership will benefit from our internal IP to address digital asset custody which is integral for keeping a correlated relationship with digital spot and physically delivered derivatives,"" said Andrew Keys, Managing Director at ConsenSys Capital Asset Management.
Ether is a cryptofuel that powers computation and storage on the Ethereum platform. As one of the first crypto-commodities, Ether has developed robust spot markets in various jurisdictions since the network became operational in July 2015. While recent Bitcoin futures contracts provide exposure to Bitcoin pricing with minimal counterparty risk and no token custody concerns, they do not provide physical delivery.
Physical delivery of Ether tokens is important in an ecosystem that requires ether token to power it, and as a result, is a more robust relationship between the derivative and the underlying spot markets.
About trueDigital Holdings LLC
trueDigital Holdings, LLC, a New York-based global financial technology company, provides innovative solutions to financial markets utilizing blockchain-based technologies to enable frictionless asset transfer and settlement. trueDigital has also created the first-of-its-kind margined deliverable swap contracts on Bitcoin as well as the first institutional OTC-based digital asset reference rates.
About ConsenSys and ConsenSys Capital Asset Management
ConsenSys AG is a venture production studio that specializes in building decentralized applications
(DApps), enterprise solutions and various developer tools for blockchain ecosystems, focused primarily on Ethereum. Powered by smart contracts, and secured through encryption, our applications provide the benefits of transparency, auditability, and tamper-resistance that are unique to blockchain-based solutions. For more information visit www.consensys.net.
ConsenSys Capital Asset Management is the asset management arm of ConsenSys AG, the world’s largest blockchain venture production studio and a leader in the blockchain ecosystem. CCAM seeks to manage the risk and returns of digital assets. CCAM’s deeply experienced financial services team Leverages off ConsenSys’ unique position as a global blockchain thought leader and comprehensive expertise from protocol to decentralized applications and as a lead steward in developing the Institutional market infrastructure to ensure proper safeguards are established in the emerging digital-asset asset class. For more information visit www.consensys.capital.