Gemini Joins Derivatives Arms Race as EU Crypto Demand Soars

Gemini Trust Co., a prominent U.S.-based cryptocurrency exchange, has expanded its European Union (EU) offerings to include staking and perpetual futures contracts. This move aligns with the firm’s broader strategy to diversify its product suite and capture a growing segment of institutional and retail investors seeking exposure to crypto derivatives and yield-generating assets. The enhancements, announced earlier this quarter, reflect the evolving demand for sophisticated financial products in the EU market, where regulatory clarity is increasingly supporting innovation in digital assets [1].

The new staking service allows users to earn rewards on selected cryptocurrencies while retaining custody and access to their assets. Meanwhile, the introduction of perpetual futures contracts offers traders the ability to speculate on price movements of major crypto assets without the need for physical delivery. These contracts, which feature leverage options and continuous rollover mechanisms, are particularly appealing to traders looking for high-liquidity markets with minimal slippage [1]. Gemini has emphasized its commitment to transparency and risk management, with the perpetuals offering zero trading fees and competitive margin requirements, attracting both short-term scalpers and longer-term position traders [1].

The expansion is also a strategic response to the rise of decentralized exchanges (DEXs) and synthetic derivatives protocols, such as Avantis, which have attracted significant attention in 2024 by offering traders exposure to a diverse range of assets, including foreign exchange, commodities, and stock indices, all collateralized in stablecoins. Since its mainnet launch in February 2024, Avantis has become the largest derivatives exchange on the Base blockchain, processing over $18 billion in trading volume across more than 80 markets. The platform’s architecture enables deep liquidity across multiple asset classes without the need for order-book matching, instead relying on a synthetic leverage layer backed by USDC deposits from liquidity providers (LPs) [1].

Avantis differentiates itself by introducing a system of risk tranches and time-locked liquidity parameters, which allow LPs to choose between senior and junior risk exposures, with varying levels of return potential and capital requirements. This structure mirrors the concentrated liquidity model of Uniswap v3 but is adapted for perpetual contract exchanges, offering more precise risk management. Additionally, the platform incentivizes traders to balance open positions through loss rebates, positive slippage rewards, and zero trading fees, aligning the interests of both market participants and liquidity suppliers [1].

The launch of the native utility and governance token, $AVNT, further strengthens Avantis’ ecosystem by enabling token holders to participate in protocol governance, earn staking rewards, and access fee discounts. A significant portion of the token supply—50.1%—is reserved for traders, liquidity providers, and ecosystem contributors, emphasizing a decentralized and community-driven model. The token’s issuance strategy includes airdrops, on-chain incentives, and builder grants to foster innovation in tools such as AI agents and Telegram-based trading platforms [1].

The competitive landscape for crypto derivatives is intensifying as major centralized exchanges and innovative DEXs continue to refine their offerings. Gemini’s foray into perpetuals and staking services within the EU comes at a pivotal time, as European regulators increasingly recognize the role of digital assets in diversified investment portfolios. As platforms like Avantis demonstrate the viability of decentralized structures, Gemini and similar exchanges are under pressure to innovate while maintaining robust compliance and risk controls. The future trajectory of this market will likely be shaped by regulatory developments, technological advancements, and the continued convergence between traditional and digital financial systems [1].

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[1] An analysis of Avantis, the largest derivatives exchange on... (https://news.futunn.com/en/post/61633390/zero-commission-500-times-leverage-an-analysis-of-avantis-the)