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Paradigm’s Policy Priorities for Perpetuals and Prediction Markets

Article Paradigm research
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Summary

Paradigm’s response to a CFTC request for comment prioritizes three crypto policy issues. It urges the Commission to create tailored relief for trading perpetual contracts through decentralized protocols, arguing that limiting them to centralized venues would constrain the product and keep liquidity offshore. The response supports allowing DeFi trading with reasonable limits.

For prediction markets, Paradigm calls for a clear regulatory standard defining when an event contract involves gaming and recommends that the CFTC codify a court’s interpretation through rulemaking. It also asks the CFTC and SEC to set a clear division of responsibility for event contracts tied to corporate events, with the CFTC as the primary prediction-market regulator. The document presents policy recommendations rather than empirical trading analysis; it gives no market data or evaluation of how the proposed rules would affect liquidity, investor risk, or market outcomes.

Key ideas

  • Paradigm recommends tailored CFTC relief for perpetual trading on decentralized protocols.
  • It argues that allowing only centralized venues could limit access and onshore liquidity.
  • It calls for a clear standard distinguishing gaming-related event contracts from other prediction markets.
  • It recommends CFTC and SEC coordination to clarify oversight of corporate-event contracts.

Tags

CryptoPerpetual futuresDeFi

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.