Ostium Labs, a startup building onchain perpetuals markets for traditional assets, launches mainnet

Ostium Labs, a new blockchain-based perpetuals trading startup, unveiled its public mainnet on Thursday. Unlike other onchain trading platforms, Ostium is targeting global macro markets and traditional market currencies.

In other words, it's an onchain platform for trading non-digital assets.

The platform, named after the famed ancient Roman port city, will enable one-click trades on traditional assets through a crypto wallet. It’s essentially a platform for anyone who wants to trade commodities — from gold to natural gas — without the monetary and regulatory restrictions surrounding traditional commodities exchanges.

“With $10 you could trade any asset that you wanted to express a market view on rather than going through these very gated, more traditional sort of underlying asset marketplaces or going through these sort of synthetic markets that have all sorts of market structure issues,” Ostium CEO Kaledora Kiernan-Linn told The Block in an interview.

Kiernan-Linn, along with her co-founder Marco Ribeiro, first thought of creating a permissionless trading environment using blockchain while studying at Harvard. During the outbreak of the Russia-Ukraine war, both wanted to trade commodities like lithium and wheat but found limited options.

“The contract sizes on places like the CME, if you're actually trading the underlying market, are large. You don't have a lot of flexibility on leverage or size, and we found it quite difficult to do,” said Kiernan-Linn, a former ballerina at the Royal Danish Ballet.

There is a centralized listing process on Ostium, and users can request to add markets for assets like silver or the Hang Seng Index. Users trade synthetic versions of these assets that track the price and can take either long or short exposure.

The team built their blockchain oracle to feed real-time data to traders and is working with third parties to aggregate OTC and market maker data. It is also using Ethereum ETH -1.43% -based infrastructure provider Gelato to run keepers, i.e. bots that automate smart contract tasks, for the platform.

The general thesis behind the startup, which is backed by investors including LocalGlobe, General Catalyst, Susquehanna and Alliance DAO, is that trading assets is a way to express a view on current and future events — like the outbreak of war or the impact of elections.

Despite a limited user base on the testnet, most of which found the platform organically, Kiernan-Linn said there is clear demand for a real-world asset trading platform like this. For instance, in the week after China introduced a new quantitative easing policy, Ostium saw a 550% jump in its FX and commodities perpetuals volumes. She also anecdotally saw more and more crypto traders discussing traditional assets.

“The vision is that anybody can have a view on the future and could express that through a particular strategy,” Kiernan-Linn said. “Let's say if Trump wins and the odds of Powell cutting rates four times in the next quarter are higher than 75%, I wanna go max long some basket of risk assets. I would call that a bullish U.S. strategy.”

In the coming months, the team also plans to launch a wrapper for popular predictions market Polymarket, which would enable traders to place bets using conditional, if-then, statements expanding the optionality of what are today just binary yes/no markets.