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Sequoia-backed startup Band Protocol releases its first dApp ‘BitSwing’ that allows users to trade bitcoin binary options

Quick Take

  • Sequoia India-backed blockchain startup Band Protocol has released its mainnet and its first dApp
  • The dApp, BitSwing, allows users to trade bitcoin binary options 
  • Band Protocol co-founder and CEO, Soravis Srinawakoon, told The Block that binary option is “one of the simplest financial derivatives that most people can understand”

Band Protocol, a blockchain startup backed by venture capital firm Sequoia India, has released its mainnet as well as its first decentralized application (dApp) called “BitSwing,” which allows users to trade bitcoin (BTC) binary options, a type of derivative product.

Revealing the news exclusively to The Block on Monday, Band Protocol said BitSwing users will be able to take a long or short position in the BTC/USD market by predicting whether BTC’s price one minute later, will be higher or lower than the spot price.

“Binary option is one of the simplest financial derivatives that most people can understand,” Soravis Srinawakoon, co-founder and CEO of Band Protocol, told The Block, adding that when BitSwing was launched in testnet for one week, it saw over 40,000 transactions - “a significant adoption rate for dApps.”

To participate in the binary options trading, users will have to install Metamask or any similar Web3 wallet that operates on the ethereum-based Kovan testnet, Band Protocol said. Users will then be able to take a long or short position via ether (ETH), betting if BTC will go up or down from that initial position, determined by Band’s decentralized data oracle. “If you are correct, you double the amount of ETH you put in otherwise you lose your stake,” Srinawakoon told The Block.

Indeed, that’s how binary options work - more like a prediction, which can either be right or wrong, but nowhere in between.

Admitting that the one-minute window is “too short,” Srinawakoon said that the window will be expanded as well as more cryptocurrencies will be added to show the potential of decentralized finance or DeFi.

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