Crypto Derivatives Exchange Deribit Explores Expanding Into Asset-Backed Crypto Products

Crypto derivatives exchange Deribit is building on the success of its recent addition, Pax Gold (PAXG), as it explores expanding into asset-backed crypto products.

Crypto derivatives exchange Deribit is exploring an expansion into asset-backed crypto products following the success of adding Pax Gold (PAXG) to its platform.

Within its first week, PAXG trading on Deribit surpassed $250 million in notional value, highlighting strong interest in gold-backed tokens among traders, according to company executives.

In an interview with Benzinga, Shaun Fernando, Deribit's Chief Risk Officer and Head of Product Strategy, described the debut as something that was expected given the market demand.

"There's a significant overlap between gold and crypto traders," Fernando said. "PAXG provides both stability and flexibility, making it a natural fit for our platform."

According to Fernando, PAXG, which is backed 1:1 by LBMA-accredited gold reserves, offers several advantages to traders, including 24/7 trading, no management fees and reduced transaction costs compared to traditional gold ETFs.

"It's a much more stable asset," Fernando said, adding that traders can also use PAXG as a cross-collateral asset while hedging their inflation risk.

The success of PAXG has also prompted Deribit to consider other high-value asset-backed products.

CEO Luuk Strijers emphasized the company's focus on quality in expanding its product offering.

"We focus on quality, not quantity," Strijers said. "Our goal is to provide long-term value by identifying assets with real demand and stability."

Strijers also highlighted PAXG's utility within Deribit's ecosystem, especially its role as cross-collateral.

"Traders can use gold to hedge risk while maintaining liquidity for other strategies, something not possible with traditional gold products," he explained.

This functionality allows traders to diversify their portfolios and manage market risks more effectively.

According to Fernando, gold's unique characteristics as a stable asset make it particularly appealing to traders who are looking to diversify.

"Gold has moved 27% year to date, showing significant activity driven by factors like Federal Reserve actions and geopolitical tensions," Fernando said.

Strijers added that the decision to prioritize gold-backed tokens was based on their proven demand and utility.

"We are not just adding products for the sake of it," Strijers said. "PAXG fits well with our focus on high-quality assets that provide long-term value."

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