Arrow DFMs

Arrow decentralized financial markets (DFMs) are the financial engines of the future

Arrow DFMs implement a low-level protocol for creating and settling options on publicly available asset prices. Cash-settlement operates through a network of decentralized aggregate counterparties (DACs) financed by liquidity providers in exchange for platform income.

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Features

  • Cash-settled: A single numeraire is used to settle all contingent claims. This means underliers can be on-chain or off-chain.
  • Decentralized: Code is Law replaces centralized settlement. Implemented through a network of DACs.
  • Fast and Secure: Runs on Avalanche virtual machines. Front runner resistant and blazing fast.
  • Prolific: Customize and combine options, call spreads, put spreads, futures and synths.

The Technology Suite

The Arrow protocol implements a decentralized aggregate counterparty (DAC) to act as both a settlement authority and a funding vehicle for each user-chosen reference asset. We call the DAC coupled with a contract factory a decentralized financial market (DFM). DFMs live on blockchains and generate economies of scale for contingent contract creation and settlement.

Research

Research drives our design choices. Click here to see a key set of papers that have helped to shape our thinking.

The Arrow Team

The Arrow Research Group was founded in 2020 by Patrick Kiefer and Edward Mehrez. Both are financial economists by training. At Cornell's Initiative for CryptoCurrencies and Contracts (IC3) workshop in July 2020, Patrick and Edward were joined by Austin Liu and Preston Rozwood to produce a nascent version of the Arrow protocol.

Arrow is now a global project with partners and team members from New York, Silicon Valley, Singapore, Hong Kong, Dubai and London. Our backers include Framework Ventures, Alameda Ventures, QCP Soteria, DeFi Capital, RenGen, CMS Holdings, Avalanche Foundation and Delphi Digital Ventures.

Arrow is built on Avalanche

Avalanche is an advanced-generation blockchain that is optimized for financial transactions and runs the Ethereum Virtual Machine (EVM). Check out our talk to the Avalanche community: