Mettalex, a decentralized token-based derivatives exchange focused on commodity markets, announced today the launch of its smart contracts on Binance Smart Chain, improving the flexibility, interoperability, and scalability of the platform.
Founded with the vision to bring the $20 trillion commodities market on-chain, Mettalex aligns the financial incentives of physical asset holders, traders, and liquidity providers. Aiming to bring commodity derivatives trading to decentralized finance (DeFi), Mettalex uses blockchain technology to enable cost-efficient trading of the world’s most desired commodities without the need for counterparties.
The deployment of Mettalex on the Binance Smart Chain will increase the flexibility and scalability for cross-chain commodity trading while making BSC liquidity readily available. Additionally, by deploying on Binance Smart Chain, Mettalex users will benefit from extremely low transaction costs. With an average gas price of 20 gwei, transaction fees on BSC are around $0.03. That’s significantly lower in comparison to popular DeFi chains like Ethereum.
“With Mettalex live on BSC, both Binance users and cryptocurrency users industry-wide, will be able to access new commodity derivatives markets. They will be able to hedge or speculate more cost-efficiently, no counterparty risk, avoid unforeseen liquidations, get exposure to unique arbitrage opportunities, and manage their capital much more effectively. With its price-band approach, Mettalex makes commodity derivatives trading substantially more intuitive and less-risky for a wider audience.”
– Humayun Sheikh, CEO of Mettalex
There are market failures inherent to today’s commodity markets, such as front running, poor liquidity, price manipulation, and loss of value in the form of margin calls. Mettalex aims to solve them with peer to contract trading and Autonomous Market Making using blockchain and Machine learning. Through smart contract technology, various exchange processes can be automated, removing expensive intermediaries. With that, both the administrative burden and access costs are reduced, lowering the entry barriers for a wide range of market participants.
According to recent data, the Bloomberg Commodity Index is down almost 11% this year, compared with a 2.1% return for the MSCI World Index and 8.8% for iShares TIPS bond ETF. Coupled with the current market situation, the launch of MTLX on BSC adds further weight to a similar sentiment shared by ex-Goldman CEO Lloyd Blankfein who believes now is a good time to get financial exposure to commodities.