What benefits does the API have for crypto traders?
On Tuesday, crypto derivatives platform ErisX launched an application programing interface (API), allowing bitcoin, bitcoin cash, ether, and litecoin to be traded in bulk.
The advent of the API provides greater integration of the firm’s block trading facility, where spot and future market cryptocurrency traders strike private high-volume deals. This applies to spot trades of at least 10 bitcoin, 100 bitcoin cash, 100 ether, or 250 litecoin, and future trades of at least 10 bitcoin contracts or 50 ether contracts.
If these deals were to be conducted on the open market, the orders could quickly impact the price of cryptocurrency, triggering volatility. The current market is already uncertain due to the global economic impact of COVID-19.
Private trade negotiations with other ErisX members, in which clearance and settlement is through ErisX’s in-house service, and then reporting it, avoids destabilization of their own trade.
In a press conference, Carlos Mosquera, Benatuil, CEO of Solidus OTC stated that: “They eliminate counterparty settlement risk while limiting market impact,”
According to the associated blog post, the parties will report their trades within fifteen minutes of execution, or at the very least, on the same day.
The REST API creates a workflow that helps users eliminate risks
In yet another press conference, ErisX noted that the REST API creates a “workflow that is familiar to capital markets professionals.”
“We are removing the friction and risks associated with OTC based workflows and expanding the universe of potential counterparties for our Members with a competitively priced service,” CEO Thomas Chippas said in the release.
This feature closely followed ErisX’s launch of ether future contracts on May 11th.
The ways in which the industry is releasing new applications, developing new platforms and creating collaborative partnerships indicates that despite the market fluctuations, cyrpotcurrency is garnering an increasing amount of interest. This is partly due to the financial turmoil from the coronavirus, but the ease, efficient, security and decentralization of cryptocurrency appeals to an even wider swath of the mainstream public and governments trying to stabilize their economies.