Crypto Derivatives Protocol Vega's Mainnet Goes Live for Futures, Options Trading

Crypto derivatives protocol Vega on Wednesday launched the first version of its mainnet which is built specifically to handle decentralized derivatives trading of financial products such as futures and options.

After launch, Vega will offer support for cash-settled futures markets initially – allowing users to deploy strategies to profit from their price gyrations.

Vega token (VEGA) stakers can propose and vote on the creation of new derivatives markets, and traders can trade without paying gas fees, a developer told CoinDesk over Telegram. VEGA is an ERC-20 token on the Ethereum network, and it interacts with the Vega blockchain over an Ethereum-to-Vega bridge.

Market makers can operate as they would on any other orderbook-based exchange, and can commit capital on-chain as liquidity providers to earn a portion of trading fees.

Importantly, traders will not require the vega token to use the protocol. There are no separate gas fees on Vega for these placing orders or trading, so for many users, unlike most other DeFi protocols, only the tokens being traded are required.

As such, trading on Vega is expected to begin in a "period of several weeks before markets and trading functionality go live, in accordance with governance processes conducted by Vega token stakers," developers told CoinDesk over email.

Vega Protocol offers no gas fees on trading at low latency and has a feature to discourage front running that developers say will attract traders to the protocol. Front running is a frowned-on practice in which a market maker or trader buys a token and then sells it on in the same transaction for a slightly higher price.

UPDATE (May 11, 2023, 09:07 UTC): Clarifies the name of the mainnet in the first paragraph. Clarifies only cash-settled futures will be offered initially. Adds trading on Vega will begin in the coming weeks.