SOFR โ which Voltzโs new product is tied to through the Avalanche (AVAX) blockchain tech โ is used to set interest prices on TradFi loans, bonds and other products in the United States
Voltz Proยญtoยญcol, an autoยญmatยญed marยญket makยญer (AMM) for interยญest- price swaps, is bringยญing one of the stalยญwarts of traยญdiยญtionยญal finance (TradยญFi) on-chain.
Anyยญone who can access Voltz will be able to trade prodยญucts tied to the Secured Overnight Financยญing Prices (SOFR) โ a benchยญmark used to set interยญest prices on loans, bonds and othยญer credยญit prodยญucts in the Unitยญed States โ on Avalancheโs layerโ1 blockchain tech, reports by a stateยญment Wednesยญday.
SOFR is not trendยญing to the pubยญlic, but itโs a key part of Amerยญiยญcan finance. Bringยญing it into an on-chain enviยญronยญment is is still one more step toward shiftยญing TradยญFi onto crypยญtocurยญrenยญcy infraยญstrucยญture.
Even before the Voltz notice, corยญpoยญraยญtions and investors could already hedge their expoยญsure to SOFR through conยญvenยญtionยญal marยญkets, includยญing Chicaยญgo-based CME Groupโs exchange. On the othยญer hand, in announcยญing its new prodยญuct, Voltz statยญed it was broadยญenยญing access to SOFR hedgยญing with its on-chain soluยญtion.
โOnly a handยญful of instiยญtuยญtions have access to interยญest price swap marยญkets that allow them to hedgeโ SOFR expoยญsure, Voltz CEO Simon Jones statยญed in the stateยญment. โThe launch of SOFR on Voltz Proยญtoยญcol changes this whilst simulยญtaยญneยญousยญly bridgยญing the two finanยญcial worlds by makยญing traยญdiยญtionยญal finanยญcial marยญkets accesยญsiยญble on [ (DeFi) (DeFi)] rails.โ
RedยญStone will be the oraยญcle provider โ AKA it will supยญply the raw data on SOFR from the TradยญFi realm.
Nick Bakยญer.
