Arbitrum Variational Launches Swaps Market to Introduce TradFi Liquidity

The derivatives protocol Variational on the Arbitrum ecosystem has announced the launch of its swaps market, with the initial markets including gold (XAU) and the Nasdaq 100 index (US100). Swaps trading is similar to perpetual contracts, both providing exposure to underlying assets, but they differ in the sources of liquidity and holding costs: the holding cost for swaps is based on USD borrowing rates, with long positions currently paying an annualized rate of 4% to 6%, while short positions incur an annualized fee of 2% to 3%. The Swaps market charges no trading fees, with an initial open contract limit of approximately $10 million per market. The team plans to increase this limit to over $50 million in the coming days, with the initial protocol supporting more than $1 billion in open contract size. The team stated that in the coming months, they will continue to raise limits, launch more swaps and perpetual contract markets, introduce trading APIs, and promote around-the-clock liquidity.

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