DAO-Governed DerivaDEX Secures Bermuda Regulatory License for Crypto Derivatives Platform
Operating under DAO governance with regulatory approval, the decentralized platform now provides crypto perpetual swaps trading following its acquisition of a test license from Bermuda's financial authority.
A Bermuda-licensed cryptocurrency derivatives platform has been introduced by DerivaDEX, which claims to represent the inaugural decentralized autonomous organization-governed exchange to function under official regulatory authorization.
The platform disclosed in an official statement that it obtained a T license from the Bermuda Monetary Authority and has commenced providing crypto perpetual swaps trading services to a select group of sophisticated retail traders and institutional market participants.
The Bermuda Monetary Authority issues its T license, also known as a test license, to digital asset enterprises that are attempting to validate a proof of concept.
During its initial rollout, DerivaDEX provides support for prominent crypto perpetual products and has indicated intentions to broaden its offerings into supplementary markets, encompassing prediction markets and conventional securities. According to the company, the platform merges offchain order matching with onchain settlement to Ethereum, simultaneously enabling users to maintain noncustodial control over their funds.
The platform further stated that DerivaDEX, which was developed by DEXLabs, employs encrypted order handling along with trusted execution environments, designed specifically to reduce front-running and additional types of market manipulation.
A decentralized autonomous organization, commonly abbreviated as DAO, represents a blockchain-powered governance framework wherein token holders participate in collective voting on decisions based on rules programmed into smart contracts instead of depending on a conventional management hierarchy.
Traditional asset managers move into DeFi infrastructure
The introduction of DerivaDEX arrives during a period when traditional asset management firms are progressively interacting with decentralized finance infrastructure built on public blockchains.
On Feb. 11, BlackRock made its tokenized US Treasury product, the USD Institutional Digital Liquidity Fund (BUIDL), available on the decentralized exchange Uniswap. The move allows institutional investors to trade the tokenized fund onchain, and included BlackRock purchasing an undisclosed amount of Uniswap's governance token, UNI.
Several days following that announcement, Apollo Global Management agreed to acquire up to 90 million governance tokens of decentralized finance protocol Morpho over four years, representing 9% of the token's 1 billion total supply. The $940 billion asset manager said the agreement includes supporting Morpho's decentralized lending infrastructure.
These developments come as US lawmakers continue debating provisions in the Digital Asset Market Clarity Act, legislation aimed at defining how cryptocurrencies and decentralized finance platforms would be regulated.
While the major sticking point remains around stablecoin yield, in January, crypto venture firms Paradigm and Variant warned that current draft legislation left uncertainty over whether DeFi developers and infrastructure providers could face registration, Know Your Customer requirements or other compliance obligations designed for centralized intermediaries.