Yes — but through a hybrid on and off-chain procedure that is designed to maximise speed and reliability.
Modern derivatives markets expect high-speed transactions and settlement and in order to be successful a high degree of liquidity is necessary to ensure that trades will be executed.
The ethereum blockchain, however, has limitations that makes this difficult. If we assume each trade is offered as a smart contract on the blockchain, a significant number of ethereum transactions will be required regardless of whether each trade is then accepted by a counterparty.
This approach would impose significant costs on the whole ecosystem. A simple trade would require two parties to an ethereum transaction:
-- A Market Maker offering their trade
-- A Counterparty - the Market Taker - then accepting the offer
This would therefore result in the minimum transaction time being equal to the time to mine two blocks. in practice that would mean transactions take tens of seconds. This does not meet modern market expectations. To solve these challenges, we propose trading contracts that are created and initially stored off-chain then once the trade is fully completed. The result is finally made available and submitted to the blockchain along with the transaction. Settlement.