US-based trading and clearing platform LedgerX has released a new type of derivative contract unique to Bitcoin called LedgerX Halving Contract (LXHC). According to the company’s February 5 blog post, the new product represents a binary option – an option where the payoff is either a fixed monetary amount or nothing.
The LedgerX Halving Contract will allow users to get a fixed payoff if Bitcoin’s next halving block happens before a certain time and date. The company explained that, while binary options are traditionally associated with gambling, Bitcoin itself carries “a fundamental economic risk that is binary.”
Bitcoin halving is an event that happens once every four years when the amount of new Bitcoin created and earned by miners is cut in half. The last Bitcoin halving happened in 2016 when the rewards fell from 25 BTC to 12.5 BTC. Current network predictions estimate that the next halving will take place on May 25, 2020.
“There will be plenty of interesting opportunities to analyze and profit from, and we will be listing several different contracts around the currently projected date,” LedgerX said.