The benchmarks will initially draw from Aave lending pools for USDT and USDC, the two most widely used stablecoins. They are calculated and published daily, based on the platform’s variable borrow rates.
Stablecoins, a $250 billion class of digital tokens pegged to traditional currencies like the U.S. dollar, are key pieces of infrastructure underpinning the crypto economy. They are a popular vehicle for trading and on-chain transactions and are increasingly used for cross-border payments and foreign exchange.
As stablecoin adoption accelerates with more institutions and businesses getting involved, so the demand for sophisticated tools that mirror mainstream financial markets is growing.
Futures contracts that settle against overnight rates are also in the works, with Galaxy, FalconX, Flowdesk and Tyr Capital set to act as market makers, the press release said.
“CDOR rates enable the creation of a broad range of financial derivatives that are currently missing in the crypto financial ecosystem,” said Ed Hindi, chief investment officer at Tyr Capital. “This addition alongside a clearer regulatory environment should exponentially increase the interaction of institutional players with DeFi.”
