XDFi, The World’s First Compliant Decentralized Futures Protocol

Flare has announced a partnership with Sindric Solutions to launch XDFi, a new decentralized futures protocol created by Wall Street veterans. XDFi aims to raise industry standards for compliance and efficiency, delivering a trustless, non-custodial futures contract purchasing environment that operates 24/7.

With regulatory uncertainty still an impediment to larger-scale institutional investment in DeFi, XDFi represents a welcome proposition for major investors. The protocol’s third-party Know Your Customer tokenization (KYCT) ensures 100% confidence that futures contract positions are purchased in a fully compliant manner. This ensures that all P2P matches between long and short positions are only between eligible counterparties. This KYCT approach is the first of a kind for DeFi, ensuring full compliance without a centralized intermediary, broker, or custodian.

“Flare technology has enabled the next phase in decentralized finance, paving the way for real world asset pricing through FTSO telemetry and futures contracts enabled by on-chain smart contracts,” said Santiago Velez, Vice President of Research and Development at XDFi creator Sindric Solutions. “This is how a global financial system is built, one piece at a time.”

Flare Co-founder Hugo Philion added: “Businesses like XDFi are exactly why we are building the blockchain for data. Flare’s enshrined oracles are secured at the network layer, which provides dapps with secure and censorship-resistant decentralized access to the broadest range of off-chain data. This creates the confidence to build high-value institutional use cases such as XDFi’s compliant decentralized futures protocol.”

The futures protocol uses a custom-built API integration and brings third-party compliance service providers to Flare for end-to-end, on-chain tokenization and compliance tracking. With a non-custodial framework, users retain full control over deposits at all times for open contract orders. XDFi boasts a fully decentralized settlement system combined with a cloud based best-pricing matching algorithm. This combination is used to match purchasers of futures contracts, resulting in intermediary-free long and short positions. Contract settlements based on Flare’s FTSO price oracle, revolutionize the way derivatives contracts are conducted on the blockchain.

A cornerstone of XDFi is its FTSO (Flare Time Series Oracle) driven futures market, wherein contracts are purchased and settled every 24 hours. In conjunction with cloud-optimized routing algorithms, this feature supports on-chain limit and market style orders for futures contracts between peers, representing a significant leap forward in DeFi instruments.

With initial support for Bitcoin (BTC) and Ethereum (ETH) futures contracts, the protocol will soon expand to other FTSO-enabled digital assets (XRP, Doge, etc.) as well as traditional commodities (WTI Crude, Gold, Natural Gas, Corn, Copper, Silver, and others).

Sindric Solutions, which has over 25 years’ of experience developing execution engines for major Wall Street firms, says community engagement and rewards are central to the XDFi ethos. Two novel mechanisms will therefore be introduced: a fee-splitting mechanism that rewards community members for their referrals based on contract purchase activity and referral generations, and a purchase-weighted voice in the setting of the “tick ratio”, a concept utilized in traditional futures markets for setting contract settlement amounts as a function of the underlying price change.

With these initiatives, Sindric Solutions hopes to incentivize community participation and foster a sense of ownership among users. As the protocol’s popularity grows, and experienced users become more familiar with the trading mechanics, the fee-sharing and governance initiatives will solidify XDFi as a leader in shaping the future of DeFi.

Ahead of a mainnet launch, the protocol will debut on Flare’s testnet, Coston2, enabling users to engage, provide feedback, and gain valuable insights in an interactive environment.



About Sindric Solutions

Sindric Solutions has spent quarter of a century building the world’s largest trading engines for firms like Merrill Lynch, Fidelity, Goldman Sachs, and Morgan Stanley. A passion for blockchain and finance led the team towards enterprise-grade, scalable solutions for brands and entities operating in the web3 world. Sindric proudly joins the Flare ecosystem with the launch of the XDFi Protocol.