eToro Aims to Put Derivatives on the Blockchain With Lira Programming Language

eToro, an Israel-based exchange platform, revealed a new programming language designed to simplify derivatives trading.

Speaking ahead of the Ethereal Summit Tel Aviv 2019, on Sunday, chief blockchain specialist Omri Ross said the language, dubbed Lira, will reduce the risks involved in settling financial contracts and enable the creation of new derivative products from assets on the ethereum blockchain.

A demo trading platform, built by eToroX Labs, was also revealed to enable retail and institutional investors to begin trading derivatives. The platform uses Lira to test a full range of contract experimentation. The language opens up the possibility to set varying time limits on trades, trustlessly swap different cryptocurrencies and write complex settlement terms.

eToro open-sourced the programming language to encourage community development of “anything from simple futures contracts to complex exotic contracts,” like collateralized loan obligations (CLOs). Further, the lab intends for the language to be deployed for other decentralized finance (DeFi) projects across different blockchains.

“We are excited to see how the market and the community will adopt this new programming language in decentralized applications, on cryptocurrency exchanges and in institutional finance,” Ross said.

Domain-specific language

Unlike “broad” programming languages used for the majority of blockchain development, Lira will be “domain-specific,” meaning it can only describe and perform a limited set of instructions. Lira’s only function is to enable counterparties to write, verify, and collect on the terms of a self-executing contract.

Ross said the typical length for scripting a financial contract in Lira is between 6-10 lines of code, leading to a simpler development cycle and less room for error.

“Essentially, financial contracts are trivial computations, typically involving a lot of money, making them a highly suitable use-case for domain-specific programming languages,” Ross said. “It can only describe a very limited set of instructions but does so with the highest level of competence and integrity attainable.”

Contrarily, broad languages, like Solidity, the native scripting language used for ethereum, enable a wide range of use cases, but also introduce risk. Ross specifically mentioned the DAO “hack,” in which a malicious actor exploited the decentralized autonomous organization’s code and syphoned off 3.6 million ETH.

Ross joined eToro in March and has lead the development of the company’s 12 stablecoins.

The Federal Reserve Bank of New York calculated the overall size of the derivatives market to be $500 trillion, in 2017.

Yoni Assia, eToro CEO photo via CoinDesk archives