How Variational is Reinventing Derivatives Onchain with Arbitrum

On-chain derivatives trading has often mirrored centralized finance models like public order books and external market makers, leading to inefficiencies and high costs. Variational, a crypto-native infrastructure company, is introducing a new approach with its Variational Protocol on Arbitrum. Designed for both retail and institutional clients, it rethinks how derivatives are traded, settled, and cleared on-chain—aiming for greater efficiency, transparency, and profitability for all participants.

Key Ideas

RFQ Model with In-House Market Maker - Variational’s retail platform, Omni, replaces public order books with a Request-for-Quote system. Quotes come from the Omni Liquidity Provider (OLP), a professional desk run by Variational, allowing the platform to capture spread revenue that would otherwise go to external market makers.
Profitability Driving User Benefits - By internalizing market-making, Omni can offer zero trading fees, a loss refund lottery, and VIP discounts, while providing liquidity across 500+ markets on Arbitrum. For institutions, the “Pro” platform extends the RFQ model to multiple competing market makers, bringing transparency to OTC derivatives trading.

Why It Matters?

Everyone can leverage this infrastructure to deliver institutional-grade OTC derivative trading without manual processes since it is easy to integrate trading bots or DeFi dashboards with Variational’s “Pro” API to access competitive, multi-dealer RFQ pricing and automated settlement.