Cryptonative Rates Market Rho Protocol Is Launched To The Public Today

Rho Protocol, the first institutional-grade market for crypto interest rates, has launched to the public today. After a successful period in private beta mode, Rho’s crypto funding rate and staking rate futures market is now open for trading.

Built on Arbitrum, Rho transforms crypto interest rates into a liquid, tradeable asset class, giving hedge funds, trading firms, DAOs, and institutional investors capital efficient tools for hedging and deploying profitable rate strategies. With nearly $10B in notional volume traded just during the beta stage, Rho has already established itself as the go-to-venue for trading crypto rates.

Why Crypto Needs a Rates Exchange

Rho’s launch represents a milestone in the maturation of the crypto ecosystem. As the functioning of the crypto market starts to represent traditional markets more and more closely, rates, as the single largest asset class in traditional global financial markets, will play an increasingly important role in the functioning of the ecosystem.

A summary of products now live for trading on Rho

Perpetual Funding Rate Futures

Rho’s Perpetual Funding Rate Futures market enables users to trade the opportunities presented by funding rate fluctuations as well as hedge against unpredictable funding rate changes, ensuring more consistent portfolio returns and improved Sharpe ratios. Users can take positions on the funding rate of BTC or ETH perpetual swaps on a number of centralized and decentralized exchanges, including Binance, OKX and Bybit to hedge or profit from funding rate fluctuations.

Example 1: A trader expects markets to turn risk-off and ETH funding rates on OKX to turn negative. They short Rho’s funding rate futures expiring in 2 months with 50x leverage, targeting a 20%+ profit on the move.

Example 2: Surging funding rates erode the P&L of traders long on perpetual futures. A trader can buy Rho’s funding rate futures to lock in predictable funding costs.

Applicable to:

• Institutions seeking alpha on funding rates
• Traders managing their risk
• Traders with large perpetual futures positions
• Market makers seeking to hedge funding rate volatility

ETH Staking Rate Futures on Rho

Rho has created the first liquid staking rates market referencing the CESR™ (the Composite Ethereum Staking Rate -developed by CoinDesk Indices and CoinFund).

On Rho, positions can be taken in Ethereum staking rates for a wide range of maturities, starting from one month to one year or longer. This gives traders the opportunity to hedge rates which are often volatile and to exploit future fluctuations in Ethereum staking yields. Rho’s Staking Rate Futures allow users to lock in fixed yields on Ether staking rewards, mitigating the risk of volatile staking rate changes, creating stable, sustainable returns.

Example: DAOs can protect their ETH staking yield by locking in fixed rates using CESR futures

Applicable to:

• DAOs, treasuries, and validators looking for yield stability.
• Hedge funds managing ETH-based strategies.

Earn Transaction Fees on Rho as a Liquidity Provider

Rho incentivizes liquidity providers to supply capital to vAMMs (virtual automated market makers) on our platform. Rho’s virtual Automated Market Maker (vAMM) is a next-generation rate market-making mechanism. Unlike traditional AMMs, which rely on continuous liquidity pools, Rho’s vAMM introduces a capital-efficient model optimized for trading rate derivatives. 

• Earn a double digit percentage of trading fees from takers executing funding rate and staking rate futures. 
• LPs can deploy capital efficiently, with leverage of up to 200x on funding rate markets and 1000x on staking rate markets  
• Long term incentives are available through strategic partnerships at Rho

Applicable to:

• Market makers
• Prop trading firms

Passively Earn Double Digit Returns with Rho’s Liquidity Vault

Earn high-yield passive returns in on-chain rate markets with the Rho Liquidity Vault, which functions on a market-neutral liquidity strategy, providing market-making functions to Rho Protocol’s vAMMs.  

Users deposit into the vault to provide liquidity and in return receive a portion of the trading fees that the vault earns. Furthermore, the vault provides liquidity for liquidations. Additional fees can be earned when liquidations are actioned.

Applicable to:

• Institutional Investors
• Hedge Funds
• DAOs
• Protocols
• Any other cryptonative traders who seek passive returns

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We’re excited to be launching Rho Protocol into the crypto ecosystem. With a recently completed seed round, backed by Coinfund, Flow Traders, Auros and Speedinvest, Rho is continually developing new products and expanding the capabilities of the platform. Further updates to the product line-up will be announced soon.