FalconX goes live with staking-yield swap in crypto industry first

Rick Steves

The staking-yield swap provides institutions exposure and safe access to new forms of yield and investment strategies.

FalconX has executed a staking-yield swap with Figment in an industry first, according to the digital assets and cryptocurrency platform for institutional investors.

Similarly to an interest rate swap, the staking-yield swap offers an exchange of a fixed interest payment for a floating rate payment. The yield received is tracked within a blockchain wallet, has an immutable record and can be viewed by anyone in possession of the public blockchain key.

Traditional interest rate swaps have their floating rate tend to reference a benchmark like SOFR, LIBOR, or the Federal Funds Effective Rate. In the case of a staking yield swap floating rate references the staking yield of a proof-of-stake token.

The new product has gone line following FalconX’s recent registration as the first and only CTFC registered swaps dealer and crypto-focused Primary Level Members of the International Swaps & Derivatives Association (ISDA).

FalconX CEO: “No institutional market for crypto derivatives existed in the US until now”

Raghu Yarlagadda, co-founder and Chief Executive Officer at FalconX, said: “This is a ground-breaking opportunity to give institutional investors well-managed risk exposure and transparency for crypto swap trading. Institutional investors are comfortable with a derivatives-focused investment thesis to maximize alpha on their returns, but no institutional market for crypto derivatives existed in the U.S. until now.”

Through this offering, executed through FalconX subsidiary Solios Inc., FalconX is creating a new category of crypto swap for the underserved derivatives market, enabling clients to earn yield through staking tokens without exposure to the volatility of the token itself and providing safe and regulated trading through a tracked blockchain wallet.

Lorien Gabel, CEO and co-founder at Figment, commented: “We wouldn’t be able to do this without FalconX bringing transparency, access and efficiency to staking yield swaps all under one comprehensive platform. Instead of taking multiple steps to execute, FalconX is able to wrap this trading into a singular contract now, with a reported and answerable regulatory framework.”

FalconX was founded to bring well-managed trading opportunities to the derivatives market. The staking-yield swap is its most recent product as the firm enables financial institutions to bring crypto to the next billion users, they said.

The company provides a crypto-as-a-service offering that powers banks, FinTech institutions, and investment applications to easily add crypto to their product offerings.

FalconX has offices in Silicon Valley, New York, Chicago, Bengaluru, and Malta and is backed by a number of high-profile investors, including Accel, Altimeter Capital Management, American Express Ventures, Coinbase Ventures, Lightspeed Venture Partners, and Tiger Global Management.

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