ClearDAO is built as an open protocol for derivatives, enabling participants in the ecosystem to manage risk more effectively and logically. On the platform, users can open buy and sell positions smoothly, assembling financial derivatives that match a specific risk profile. ClearDAO is taking a prominent position in DeFi derivatives, a sector that is still early in its development.

ClearDAO looked at the OTC derivatives market in traditional finance and, from that assessment, expects DeFi derivatives to grow in trading volume and capitalization in the period ahead. By centering its efforts on building an open platform, ClearDAO aims to address the constraints of existing DeFi derivative offerings, which are limited to their own platforms and leave little space for other projects or developers.

Another key drawback of today’s DeFi derivative platforms is that they mainly provide exchange-traded derivatives, which differs from the broad demand for customized derivatives that has already been demonstrated in traditional markets.

In decentralized finance, limiting access-or failing to release the code as open source-reduces the opportunities that blockchain has created over the past few years. ClearDAO positions itself as a strong example of decentralization through open-source platform design.

How does ClearDAO work?

ClearDAO’s SDK, or Software Development Toolkit, includes templates and the necessary utilities so developers and active traders can build notes, futures, options, and swaps in a defined, efficient, and cost-conscious way. The platform will also support marketplaces, where third parties can trade their products as they see fit, while following ClearDAO’s processes and architecture.

ClearDAO’s SDK is made up of three parts: a derivative workshop, enabling developers to design derivatives tailored to their needs using ready-to-use tools; an open marketplace with access to the open-source code for white label exchanges; and risk management tools that feature advanced quantitative risk data for macro hedging and portfolio risk management.

To enable real-time data access outside the platform and across blockchains, Chainlink Oracle will be integrated. Several established DeFi projects already use ChainLink for comparable functionality, and ClearDAO plans to rely on this existing approach rather than starting over. Chainlink is known for protecting systems that handle billions of dollars’ worth of transaction value continuously, helping guard against flash crash situations, flash loan attacks that manipulate data, and other potential vulnerabilities.