CME Announces Ethereum Micro Futures

Monday, November 1, 2021

Quick Take

  • Ethereum Name Service (ENS) launches a DAO and governance token airdrop to .ETH domain holders.

  • The Chicago Mercantile Exchange (CME) will offer Ethereum micro futures starting December 6th.

  • MakerDAO releases the Dai Direct Deposit Module (D3M) on Aave.

  • Coinbase has launched Bitcoin-backed loans of up to $1 million without a credit check.

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CME To Release Ethereum Micro Futures

The Chicago Mercantile Exchange (CME) has announced that it will offer Ethereum micro futures starting December 6th. CME already offers Ethereum futures but requires investors to bet on contacts priced at 50 ETH. The micro Ethereum contracts will be priced at one-tenth of one ETH allowing investors to make smaller trades.

Futures contracts are agreements to buy or sell an asset at a certain price on a future date. The futures 24-hour volume is currently higher than spot trading volume. Since the announcement, Ethereum has reached a new all time high of more than $4,600. CME currently has over 20 micro products including Bitcoin micro futures which was launched in May.

ENS Launches Governance Token

Ethereum Name Service (ENS), the easy-to-read naming system for crypto addresses, has announced the launch of their governance token and DAO. A snapshot of .ETH domain name holders was taken on October 31st. ENS will release details on the specifics and distribution of their token early next week. Users that owned a .ETH second level domain prior to Sunday will be able to claim ENS tokens.

Token holders will be able to assign their tokens to a delegate that will vote on proposals on their behalf. Anyone can fill out an application on the ENS discussion forum to be displayed as a delegate when users claim their tokens next week. Delegates are not awarded extra tokens for being delegates. There is also no specific POAP issued for delegates. 

Anyone is able to submit a proposal to the ENS DAO. The ENS project is already a decentralized organization self funded by domain rental fees. The root of ENS is owned by a multisig contract, with keys held by trustworthy individuals in the Ethereum community.

Coinbase Launches Crypto Backed Loans

Coinbase has launched Bitcoin-backed loans of up to $1 million without a credit check. Coinbase is offering 8% APR with users being able to borrow as much as 40% against their bitcoin holdings. To borrow the minimum amount of $10,000 (in CA), users will need to use $25,000 worth of bitcoin as collateral. Users can withdraw cash instantly to their PayPal account or they can transfer the cash to their bank via ACH.

The product has been rolled out for residents of 20 U.S. states, including CA, NY, NJ, TX, and FL. The APR is variable and based on the Overnight Bank Funding Rate, plus a margin. Fixed-term loans are available for residents of CT. Coinbase says there are no fees for the loans apart from the APR. Coinbase has not yet published information on liquidation and defaulted loans.

MakerDAO Dai Direct Deposit Module (D3M)

MakerDAO has announced a planned release for the Dai Direct Deposit Module (D3M) on Aave. DAI is Maker’s USD-pegged stablecoin backed by Ether. The D3M is a special aDAI (AaveDAI) vault with a 4% fixed borrow interest rate. Essentially the D3M will stabilize the interest rate of DAI in Aave by minting and burning DAI in exchange of aDAI.

aDAI will always be redeemable for DAI 1:1. It will also accrue Aave lending interest in real time. If the borrow rate on Aave for DAI goes above 4%, the amount of DAI in the pool would be re-adjusted with newly minted DAI backed by aDAI. When the target rate is below 4% and the D3M has previously added liquidity, the D3M function will calculate how much liquidity to remove to bring the target interest rate back up to 4%.

If successful, the new implementation will expand the supply of DAI to secondary markets including L2s. According to AAVE founder Stani Kulechov, up to $500 million worth of deposits are protected in case of a shortfall event.

Polygon Airdrops .02 Matic To Empty Wallets

Polygon announced it will be airdropping 0.02 $MATIC to wallets containing less than 0.02 $MATIC when they are depositing funds from Ethereum to Polygon. The amount is worth about $0.04, which is enough to process multiple transactions on the Polygon side chain. MATIC is the token used to pay for gas on the polygon network. To qualify for the airdrop, users must transfer any of the top 20 tokens from Ethereum to Polygon.