The complex pipes that keep derivatives trades moving are about to get a major efficiency boost in DeFi, according to Crypto Valley Exchange.

Crypto Valley Exchange’s «smart clearing» protocol will lower the capital requirements for derivatives traders by setting collateral levels in light of the traded assets’ correlations in price. In doing so, it could make DeFi more competitive with the mainstream financial markets crypto trying to replace, according to CEO James Davies.

The service is a new take on an age-old problem in DeFi: how to sufficiently mitigate counterparty risk in a trustless environment.

Traditional financial markets like CME and NYMEX rely on clearinghouses to be a trusted counterparty for every buyer and seller. They demand some collateral, but hardly 100%. DeFi markets, meanwhile, definitely lack a trusted middleman, and so can’t afford to require anything less than full collateral.

This system works, but hardly well. More collateral requirements means traders have less capital to deploy elsewhere. Davies claims this severely limits the market’s growth.

«This is the one place where all of crypto is much more conservative than TradFi,» Davies said. «We’re really, really undersized in this space, and that’s because clearing is needed to create this efficiency.»

He pointed to the seeming lunacy of requiring full margin for trades involving highly correlated assets, like forms of oil.

«If I was to go to, say [commodities exchange] NYMEX as an oil company and want to buy oil and sell jet fuel, and you asked me to put down full margin on both parts, I’d laugh at you, because those things are 90% correlated,» Davies said.

He believes the same logic should apply in DeFi. «Ethereum isn’t going to 10,000 on the day Solana goes to zero,» he said. Because of the correlation, a trader betting that ETH will rise relative to SOL shouldn’t need to post full collateral.

In his telling, clearing is the missing piece in DeFi’s effort to gobble up traditional finance. If protocols gain an ability to better manage the risk, and also do so transparently, on a blockchain, so that everyone can see what’s happening and how, then they’ll become competitive with the financial rails they’re trying to replace.

«You can’t just build a perps DeFi platform for, say, treasuries or commodities, go up against NYMEX or go up against CME, and expect to win when you have to lock up so much more collateral than you would do to trade on those platforms.» Davies said.

If crypto’s real-world asset (RWA) subsector delivers on its promise of bringing tokenized versions of everything on-chain then, according to Davies, DeFi will need a solution to the clearing efficiency problem such as this. Institutional investors won’t put up with requirements for triple the collateral capital they’re used to – especially on correlated trades, he said.

The first user is Crypto Valley Exchange itself. Already, the Arbitrum-based futures and options DEX is running dated futures orders through its smart clearing. More capabilities are coming later this year to support commodities markets beyond crypto, and Davies hopes for other protocols to plug into smart clearing, too.

Onyxcoin (XCN), the native token of its namesake’s modular blockchain, experienced a major boost over the past 48 hours, bucking the bearish market sentiment with a 150% rise.

Daily trading volume averaged around $25 million earlier this week until the token started to rip through levels of resistance. That figure has now ballooned to $600 million, the majority of which took place on Coinbase.

The surge in volume and apparent lack of visible catalyst prompted Binance to list XCN futures on its exchange on Friday.

Unlike many other Binance listing announcements, the listing did not spur an additional increase in token price, which could indicate that some investors opted to «sell the news,» creating a type of equilibrium between new buyers and old sellers.

As the native token of Onyxchain, XCN can be used for payments within the Onyx ecosystem, this includes node deployment. It can also be used to participate in governance proposals.

The token has been trading for three years but performance was largely muted in 2023 and 2024. It then rose rapidly in January, going from $0.0025 to $0.03 in 11 days, prompting Tron founder Justin Sun to question the legitimacy of price action.

«XCN chain is currently engaging in significant market manipulation. They are using high leverage and contract that could cause serious harm to many exchange users. I recommend that major exchanges pay close attention to this risk,» Sun wrote in a tweet on Jan. 24 that he’s since deleted.

UPDATE April 11, 15:46 UTC: Adds context about XCN token and now deleted tweet from Justin Sun.

In no surprise given the lame crypto price action in the first quarter of 2025, BlackRock (BLK) posted a sizable slump in net inflows into its spot bitcoin (BTC) and ether (ETH) ETFs.

In all, investors put $3 billion into BlackRock’s digital asset-focused ETFs in the first three months of the year, according to the company’s first quarter earning report. That’s an 83% drop from what was a big inflow number in the fourth quarter as prices and sentiment shot higher alongside the Trump election victory.

Taken alone, the first quarter number still signals strong demand for crypto-linked funds, even as prices deteriorated.

That $3 billion represents 2.8% of the total inflows into BlackRock’s mammoth iShares ETFs in the first quarter, which also include active, core equity, and strategic funds, among smaller categories. BlackRock at quarter’s end managed roughly $50.3 billion in digital assets, or about 0.5% of its total assets of more than $10 trillion.

Digital asset ETFs accounted for $34 million in base fees, or less than 1% of the company’s long-term revenue.

The decline in bitcoin and ether ETF inflows last quarter came alongside a 70% quarterly fall in iShares’ overall inflows to $84 billion from $281 million as global markets attempted to navigate the changing macroeconomic environment under President Trump.