Crypto derivatives protocol Vega on Wednesday launched its Alpha mainnet, a blockchain built specifically to handle decentralized derivatives trading of financial products such as futures and options.
Alpha offers support for a range of market types and assets, including futures, spot swaps, options and perpetuals that track the prices of various tokens – allowing users to deploy strategies to profit from their price gyrations.
Vega token (VEGA) stakers can propose and vote on the creation of new derivatives markets, and traders can start trading without paying gas fees, a developer told CoinDesk over Telegram. VEGA is an ERC-20 token on the Ethereum network, and it interacts with the Vega blockchain over an Ethereum-to-Vega bridge.
Market makers can operate as they would on any other orderbook-based exchange, and can commit capital on-chain as liquidity providers to earn a portion of trading fees.
Importantly, traders will not require the vega token to use the protocol. There are no separate gas fees on Vega for these placing orders or trading, so for many users, unlike most other DeFi protocols, only the tokens being traded are required.
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Vega Protocol offers no gas fees on trading at low latency and has a feature to discourage front running that developers say will attract traders to the protocol. Front running is a frowned-on practice in which a market maker or trader buys a token and then sells it on in the same transaction for a slightly higher price.