Fetch.ai introduces Mettalex, a decentralized exchange permitting its users to trade commodity and crypto derivatives. The users will have access to the trading of traditional crypto trading pairs and commodities like gold, silver, cobalt, oil, and even the stock market indices.
Humayun Sheikh, the CEO to both projects, mentioned during interview to Cointelegraph that the exchange provides both the advantages of using new investment products usage and three main advantages to commodity sellers:
“One very key advantage for them is that they can build the market and they can bring the market to people. So second, of course, the costs are much lower. […] And really the third benefit is the way you can actually operate these instruments. For them to have these instruments, they will have to hedge their risk in two or three different places. What this enables them to do is just bring it into one instrument so the margin costs are low.”
Sheikh said that the costs are reduced by means of using Fetch as a sidechain. He also mentioned that Mettalex has already secured commitments from around 30 commodities traders:
“I think it’s around 30 traders at the moment who are initially going to be jumping. And these each trader is probably trading in the region of around one hundred million a year.”
According to the CEO, the need for posting a collator in cryptocurrency should not be the problem for the users who come from the traditional world. He is convinced that lot of people know enough about crypto and exchange has very user friendly interface.
Those who will be creating markets on Mettalex will have to provide security in the form of stablecoins, which will be converted into the platform token MTLX. Since the project is decentralized, the token will be applied for both liquidity pools and governance.
The already promoted DeFi space may get a new and unique playground with Mettalex.