Crypto Investment Platform eToro Introduces New Programming Language To Improve Derivatives Trading

Blockchain, Innovation, News | September 16, 2019 By:

Global multi-asset investment platform eToro has introduced a new open-source programming language for financial contracts.

Founded in 2007, eToro is a regulated global brokerage firm for trading cryptocurrencies, stocks, commodities, ETFs and more. It has created a global community of more than ten million registered users who share their investment strategies and anyone can follow the approaches of those who have been the most successful. The platform allows investors to hold commodities, stocks, ETFs and cryptocurrencies, alongside thousands of other financial instruments all in one portfolio.

eToro said that the new programming language, dubbed Lira, is the first step in bringing the $500 trillion OTC derivatives market onto the blockchain by introducing a new formal contract language. Lira, which was developed by eToroX Labs, can be used to write OTC financial contracts for assets currently on the ethereum blockchain. It permits a possibility to set different time limits on trade, swap different digital assets in a trustless manner, and program complex settlement conditions.

Professor Omri Ross, eToro’s Chief Blockchain Scientist, said that 45% of smart contracts on the ethereum blockchain have errors because of the broad nature of their design, adding that LIra is built on formal verification, a mathematical equation that proves the language will deliver the promised outcomes.

“We have decided to make this language open source so that the community can help to move forward what we hope will be an important addition to DeFi,” Ross said. “We envision this code to be developed further across different blockchains and will include algorithms to help reduce collateral burdens thereby helping to increase liquidity in the derivatives market. By being able to write financial contracts on the blockchain, Lira could open up the derivatives market and decentralise one of the most important financial industries in the world.”

Yoni Assia, CEO and Co-Founder of eToro, said that bringing the OTC derivatives market onto the blockchain will bring more transparency and capital efficiencies to the industry.

“Activities in the post-trade cycle, such as settlement and the clearing of derivatives, are both expensive and a source of systemic risk,” Assia said. “We believe that blockchain technology can provide a secure execution environment in which settlement is guaranteed by design. That is why today we are introducing a new formal contract language – Lira. This has the potential to open up and transform the derivatives market.”