In brief

  • Binance has unveiled a DeFi-pegged index in the form of a perpetual contract.
  • Users can now track the performance of 10 protocols within the DeFi sector.
  • The contracts allow up to 50x leverage and are paid out in USDT.

Hopping onboard the decentralized finance (DeFi) bandwagon, Binance has unveiled an index comprised of ten several popular DeFi tokens, allowing users to gain exposure to the flourishing sector via perpetual contracts.

Among Binance's novel index sits Band Protocol, Compound, Kava.io, Aave, Chainlink, Maker, Synthetic Network Token, 0x, Swipe, and Kyber Network.

Listed on Binance futures, the perpetual contracts will be dominated and paid out in USDT, providing leverage of up to 50x.

"Binance Futures has been at the forefront of developing new products for users, and we now offer nearly 50 futures pairs, the most in the market by quantity and variety, said Aaron Gong, VP of Binance Futures, adding, "Response to our range of DeFi derivatives has been continuously positive and it is clear that there is growing demand. We are excited to offer the USDT DeFi Index that enables users to more easily access DeFi and further diversify how they trade."

Much like the traditional futures contract, perpetual contracts track the underlying price performance of an asset. As such, users aren't directly exposed to the underlying DeFi tokens but rather to the indices' aggregate performance. One major difference between futures and perpetual contracts is that perpetual contracts—as their name suggests—have no expiry or settlement date. 

The DeFi index, and its average weighted price, will be rebalanced each week via Coinmarketcap, reflecting changes in both capitalization and volume among other market conditions. This, Binance says, will help capture the quickly shifting trends of the DeFi sector.

While Binance futures already facilitates the trading of individual DeFi tokens, this marks the first DeFi-centric index on the platform.

The Defi sector has gone from strength to strength since its inception, capturing a total of more than $7 billion in investor value, according to DeFiPulse—a massive $6.3 billion of which has been accumulated this year alone. One token alone, Aave, is up 20,000% in the last year alone.

With DeFi expanding at breakneck speed, it's no surprise that Binance is attempting to capitalize further on the sector.