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The goal of bridging DeFi with traditional markets has been a topic of technical speculation for years. Integrating RWAs on-chain is fraught with difficulties that do not exist in traditional crypto asset trading. As a result, DEXs need a sophisticated approach to source and normalize RWA data that accommodates the complexities of traditional markets, while also preventing pricing errors that could harm traders. For example, traditional financial markets for RWAs don't operate around the clock, leading to potential pricing discrepancies and vulnerabilities when off-chain assets are traded outside their native market hours.
Ostium's latest research into real estate index funds highlights the need for innovative portfolio management models that integrate digital and real-world assets. Even common traditional assets, such as commodity perpetual indices, also demand careful management to prevent front-running and ensure continuity without undue risks or unexpected costs.
To accurately represent RWAs on-chain, Ostium sought a partner capable of working closely together on a bespoke solution to incorporate market hours, custom aggregation logic, and underlying market liquidity conditions into price reports. The lack of reliable and timely price feeds for on-chain assets available from data providers, paired with Ostium's requirement for specialized RWA solutions, further accentuated their need for a tailored solution.
Ostium partnered with Stork to create a bespoke solution that could handle the complexities of continuous trading and accurate pricing, even around periods of low underlying market liquidity. This collaboration marks a significant step forward in integrating RWAs into the DeFi ecosystem.
Given their deeply complex and unique requirements, Stork worked closely with Ostium’s team to develop custom aggregation logic to accommodate the unique characteristics of each asset class. Core to Stork’s solution was the creation of custom feeds, constructed using Ostium’s unique pricing algorithm and a bespoke Stork aggregator capable of parsing both market hours and bid/ask data from this pricing algorithm for inclusion in price reports. These feeds include metadata that allows Ostium to support users with exceptional portfolio risk management capabilities.
By addressing critical challenges such as pricing outside market hours and managing futures rolls using Stork, Ostium was able to finally overcome the longstanding technical barriers to RWA integration and set the industry standard for on-chain RWA trading moving forward.
Decentralizing RWA trading enables both blockchain enthusiasts and crypto-curious investors to gain access to previously inaccessible global markets. This partnership marks a critical milestone in digital asset trading, positioning Ostium as a scalable and purpose-built platform for on-chain RWA trading.
Equipped with Stork’s data feeds, Ostium is poised to be the first DEX to support trading pairs for indices like China’s Hang Seng 50 and the Japanese Nikkei 225. Beyond support for new markets, Stork’s data feeds equipped Ostium to effectively implement new RWA-focused risk management metrics, including their recently announced Imbalance Score.
These new capabilities, combined with Stork’s 100% platform uptime and 50ms data latency, positioned Ostium for a groundbreaking public launch. The platform has processed over $4 billion in trading volume and has seen significant growth in its newly launched indices market.
