Blockchain Developer's Guide

Aggregate and insurance products

One of the common criticisms of blockchain tokens is the high volatility of individual assets. To counter this, there have already been a few attempts at creating token pools, or tokens that represent a basket of other tokens in order to reduce volatility and risk, much like ETFs and mutual funds do for stocks.

We expect further attempts at building more stable and better-hedged token products. One possibility would be a new insurance product, protecting against negative volatility in return for a fee. While in practical terms a similar effect can be achieved with futures and options, insurance is a concept more familiar to ordinary consumers and retail investors who have taken an interest in the token markets. ...