Crypto derivatives commutation FTX recently launched "TRUMP," a new futures trading product that lets users bet on President Trump'due south re-election in 2022.

"And then far nigh of the book has traded on the offer, implying that traders think Trump is likely to win re-election," an FTX representative told Cointelegraph. The TRUMP crypto product is simply a futures contract that is worth $1 if Trump wins the 2022 presidential election and $0 if he does non.

TRUMP's value at any given moment tin can be understood as an expression of how likely the traders think he is to win at any given moment. When TRUMP is worth $0.50, users are effectively proverb The Donald's victory is a fifty-fifty shot.

At the fourth dimension of this writing, the contract is worth $0.62.

FTX specifically restricts the usage of TRUMP from a number of countries, including the European Matrimony, Hong Kong, and Canada. Utilise of the contract is even banned in the United States, the very location of the election that determines the ultimate value of the TRUMP crypto contract.

Crypto trader and influencer Moon Overlord offered a comedic response to the geographic restrictions, tweeting:

Derivatives products seem complex at starting time

Crypto derivatives trading has expanded significantly over the past several years, with exchanges such equally BitMEX and OKEx posting pregnant trading volume for their Bitcoin futures trading products. Mainstream finance even jumped on the bandwagon with the Chicago Mercantile Substitution'southward Bitcoin futures trading launch in 2022, and its later options trading launch in 2022.

These derivative products aren't cryptocurrencies, however. Participants cannot ship futures, options or other derivatives to other exchanges. These products trade contracts that are native to the exchanges hosting them. The aforementioned goes for FTX'due south TRUMP production.

FTX decided on futures instead of smart contracts

FTX could have launched TRUMP as a decentralized, smart contract-settled betting product similar those seen in Augur's predictive markets. Yet FTX decided to become the derivatives road.

An FTX representative said:

"At that place are two main reasons that nosotros used a futures contract instead of a smart contract.  The first is that futures permit for much more powerful and flexible margin; the second is that a smart contract would rely on a blockchain-based oracle to settle the contract anyhow, which would by and large defeat the attempt at decentralizing the result."

As the crypto market place continues to chase mainstream finance and the products it offers, traders can expect more elaborate trading products like TRUMP in the future. Equally role of a similar movement, FTX recently launched Bitcoin options trading in January 2022.