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Derivatives and /or Synthetics - Money Legos bounty




almost 2 years ago



37400 USD



Derivative markets are important because their behavior influences the price dynamics of cryptocurrencies themselves. Derivatives are an age-old financial tool used by traders and merchants. Derivatives are used as a form of security against an underlying asset that has financial value (a fixed price). Derivatives were used as contracts between two parties who wanted to trade, buy or sell a product based on its future price. Crypto derivatives can be in the form of (a) futures, (b) perpetual swaps, (c) options, (d) forwards, (e) leveraged tokens.

Without decentralized blockchain, synthetics are only enforceable by legal constructions. It is a game primarily played by institutional players like banks and investment firms. Legal constructions, bring pricy middlemen. Through decentralized smart contracts, we can cut out these middle men. These traditionally expensive contracts, now are diminished to a transaction fee on a blockchain. Traditionally only bigger players had access, but through decentralized exchanges on blockchain, anyone with access to the internet will be able to have access to trade synthetics and have synthetic investments.

Challenge Description

The future of the internet is being built on Tezos–with user participation and governance at its core. Users can directly and frictionlessly interface with each other over a decentralized network, exchanging value and interacting with various applications, without the need for intermediaries. On Tezos, Web3 can be a truly user-governed and user-centric movement, the way it was meant to be. In this bounty, we are seeking for DeFi solutions in building a decentralized exchange that will provide a decentralized solution for trading derivatives/ and or synthetics. For this reason we'd like to award the most innovative and promising projects that would achieve this feat. Derivatives are financial contracts set between multiple parties that ‘derive’ their value from an underlying asset or benchmark. The contract is signed between two or more parties that want to buy or sell a particular asset for a specific price in the future. The value of the contract is therefore determined by fluctuations in the price of the benchmark it derives its value from. Often these underlying assets used in derivatives are cryptocurrencies, commodities, bonds, stocks, market indexes and interest rates. Synthetics are contracts between two parties that both bet on an opposite outcome for the value of an asset and make profits or losses on the outcome. The actual asset is not purchased in this contract. This is interesting for assets that have very low liquidity, are hard to transact, or are not available to trade.


The exchange will run fully on components of the Tezos ecosystem. The exchange should make use of Harbinger, which is an oracle built on Tezos. We recommend making use of the existing project in the Checker codebase.

References or inspirational links

SEXP is a synthetics exchange on Tezos currently in development since 2021.


For example: Submissions must be open source (MIT license) Submissions must have a working prototype deployed live on the current testnet Submissions must have a writeup on what the product backlog for reaching 'completion' looks like Submissions must list the addresses of their token contracts


A detailed whitepaper of at least 5 pages with reasonable font size and margins, written to the standards of a scientific publication (including citations for all non-original material), detailing: Tokenomics Voting models The consequences of such Potential challenges and risks A slide deck, and an approximately 5 to 10 minute video, explaining the main concepts in the whitepaper.


$13000 in tez for the best submission $5000 in tez for the the second best submission $2000 in tez for the third best submission

We reserve the right to not pay out prizes if none of the applicable submissions meet the minimum criteria.