Earlier today, on 29th October, the largest digital asset derivatives exchange Deribit announced that it now supports hybrid custody solutions, which enable capital markets traders to onboard third-party custodians and brokerages more quickly.
Fidelity Digital Assets®, Copper Securities, and Zodia are among the custody firms that will use the hybrid model at launch; additional firms will be added later this year, according to the announcement released by the platform.
Deribit CEO Luuk Strijers commented on the news saying, “Throughout 2024, we have continued to focus on our institutional clients to create a fulsome trading experience in the broader finance ecosystem.”
He adds, “Supporting a hybrid custody model marks a significant step forward, providing enhanced flexibility for accessing Deribit’s world-class digital asset derivatives trading offerings. By allowing for a hybrid model with these external custody solutions, we empower our clients while maintaining the seamless trading experience Deribit is known for.”
Deribit’s Traders Can Now Access Faster Derivative Trade
As Deribit’s third-party custodians are currently fully integrated with the exchange, traders can use an API or Application Programming Interface to access all of Deribit’s trading features without ever having to remove their funds from their account.
But because these integrations take time, institutional traders have fewer options for securing collateral and find it more difficult to access the exchange. This issue is resolved by the hybrid custody model, which allows custodians to offer Deribit as a trading venue without requiring complete integration. This allows traders who use Fidelity Digital Assets® and other platforms to access the Deribit trading platform more quickly.
A hybrid model requires Deribit traders who use a custodian that isn’t integrated with the exchange to store a portion of their assets on the exchange in order to satisfy collateral requirements; the remaining portion will be secured by their preferred custodian.
By default, members must deposit 20% of their total assets on Deribit; however, this amount may vary based on trading activity, exposure, risk tolerance, and market circumstances. Profit and loss settlements take place on the Deribit platform every day.
Deribit’s EU Expansion And Token Options Supply
Today’s news of hybrid custody comes amid Deribit’s expansion plans. According to a report by Bloomberg, despite a decline in the volatility of digital assets, Deribit, the biggest cryptocurrency exchange for options, is continuing with its plans to offer customers contracts on additional coins.
Deribit had previous said that it will begin offering options on Solana’s SOL, the XRP token associated with Ripple Labs, and Polygon’s MATIC in January, adding that a lack of volatility “won’t defer our plans.” Also, the company will also submit an application for a brokerage license in the EU.