Mettalex, a decentralized commodities derivatives exchange on Fetch.ai, has partnered with S&P Global Platts, a press release on January 24 reveals.
S&P Global Platts and Mettalex Join Hands for better Efficiency and Flexibility
S&P Global Platts has a global presence as a provider of energy and commodities information. It is also a world-renowned supplier of benchmark price assessments for the physical commodities market. Following this deal, Mettalex will access secure commodity and energy price data feed to power its decentralized swapping operations leading to more capital and cost efficiencies for traders. According to Mettalex, this would further open the DeFi markets, allowing access to more commodities and instruments as more are brought on-chain.
“We believe that a wide range of commodity assets will eventually become tradable on-chain. Mettalex’s mission is to advance this process by enabling the market to manage risk, particularly in new niche commodities markets, and democratizing access to the raw materials asset class. We are thrilled to have one of the leaders in the price benchmarks space, S&P Global Platts, to help us in this endeavor,” Mettalex’s Founder and CEO, Humayun Sheikh, said.
Additionally, with the integration of S&P Global Platts industrial-grade data, there will be more flexibility among Mettalex users since they will now initiate long and short positions to draw maximum benefits from fluctuating commodities estimated to be worth $20 trillion.
Mettalex Lowers the Barrier for Entry
Fetch.ai is a machine learning-driven blockchain from where Mettalex is deploying from. The distributed ledger offers several advantages: better privacy preservation and assured security due to the chain’s high level of decentralization.
With a secured and reliable base, the decentralized derivatives exchange allowing on-chain trading of commodities and access to unique DeFi markets has attracted users from across the board. The exchange hopes to solve liquidity challenges while improving market access, offering better risk management, and increasing cost and capital efficiency.
Through their rails, Mettalex offers DeFi-sourced liquidity with even lower entry barriers for traders to access more markets that were previously unavailable in DeFi. Specifically, with the fusing of S&P 500 Platts reliable data, Mettalex is also providing a fitting solution resolving pain points faced by SMEs. At the same time, this partnership helps promote the active development of on-chain solutions integrating automated market maker models whose risks can easily be quantified and further boosted by better cost and liquidity efficiency.
A Year of Mixed Fortunes
The S&P 500 Platts partnership with the DEX follows a year of mixed fortunes in the commodities market. Because of the effects of the COVID-19 pandemic and infrastructure developments in the United States, prolonged supply chain disruptions led to a slowdown in delivering vital raw materials. Combined with supremacy wars between China and Australia, the situation worsened, forcing some commodities to multi-year highs. The resulting squeeze had a significant effect on the commodities market.
Meanwhile, while the commodities market remained tumultuous, DeFi soared. By late January 2022, the market had over $190 billion in assets under management in various DeFi protocols, including decentralized exchanges, across supporting blockchains. Considering the decentralization, incentivization mechanism, and trading automation. DeFi solutions continue to draw traders across the globe.