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How Gemini’s derivatives used Kaiko benchmarks for fair valuation
THE PROBLEM
With an ambition to diversify its derivatives trading platform, Gemini needed a consistent pricing mechanism to establish a fair value for risk management and settlement for specific underlying cryptocurrencies. This would help alleviate the challenge posed by the variable prices quoted across different exchanges, and provide a single independent market valuation.
With a clear understanding of their requirements, Gemini entered the market to find a reliable and consistent benchmark that would give them a consensus price.
THE solution
After evaluating their data options, Gemini engaged Kaiko around their BMR-compliant digital asset Benchmarks. Built using aggregated trades data collected from vetted exchanges through a robust methodology, Gemini were able to instantly source a price most representative of fair market value, calculated by Kaiko. This price was calculated in real-time – updating every 5 seconds – and was used as an input for settlement in their perpetual contract offering.
A STABLE AND RELIABLE FOUNDATION FOR SERVICE GROWTH
With Kaiko Benchmarks providing a fair market valuation of the cryptocurrency underlying Gemini’s derivatives contracts, they were able to nullify the impact of anomalous price movements, providing more accurate and consistent valuations.
This was fundamental to Gemini offering reliable and stable derivatives services and has laid the foundation for future expansion and success.
who is gemini?
Founded in 2014, Gemini is a market-leading cryptocurrency exchange and custodian. As a crypto-financial service provider, they offer a wide range of services to retail and institutional investors through their crypto derivatives trading platform.
Dedicated to building crypto products that are simple and secure, Gemini provides a world-class experience to help their clients buy, sell, and store their cryptocurrency.
Kaiko INDICES SOLUTIONS
See how our comprehensive suite of proprietary BMR-compliant benchmarks and indices can help your organization with derivatives settlement.
Benchmarks
Plug-and-play single and multi-asset benchmarks, backed by expert quant research and 24/7 support.
Customized
Indices
Custom-built multi-asset indices for your specific needs, produced by crypto experts with total flexibility.
Calculation Agent Services
Expert benchmark calculations and NAVs using your methodology, delivered with exceptional speed and reliability.
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