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Tracer — The Derivative Meta-Protocol

Posted on:1 February 2022 at 21:00

Look at the top DeFi protocols. Today, the top 5 by TVL are Curve, Maker, Convex, Aave, and WBTC. Do you notice anything in common? All of these protocols are solving unique, one-dimensional problems.

Curve provides an efficient solution for exchanging digital tokens for others. Maker solves the lack of money in blockchain-based ecosystems. Convex boosts rewards for the Curve token holders. Aave provides users access to leverage or yield via fixed income. WBTC brings Bitcoin to DeFi.

Now, scroll the list down to the 367th place, and you will find Tracer. On the surface, Tracer seems just like the five protocols above; it solves the lack of portable leverage with its Perpetual Pools product. However, under the hood, Tracer is packing much more. Let’s explore what makes Tracer a meta-protocol and why Tracer is perfectly positioned to capture the lion’s share of new DeFi activity in the next ten years.

What’s a meta-protocol?

Simply, a meta-protocol is a parent to its children protocols. More accurately, a meta-protocol is a “framework for the negotiation, distribution, and automatic code generation of communication protocols”. (1)

I apply this definition rather loosely but with the same principles in mind. For me, a blockchain-based meta-protocol provides a high level of flexibility for its users. Furthermore, a meta-protocol lives freely on the blockchain, and its creator cannot censor its applications. Finally, a meta-protocol distributes code for anyone to apply consistently with little overhead across various applications.

Why is Tracer a meta-protocol?

Factories are a fundamental part of Tracer. Combined, the three Tracer Factories allow the application of any information to any derivatives contract to create, theoretically, an unlimited number of markets.

Tracer Factories abstract, automate, and standardise the creation of new markets into three distinct parts. The Template Factory allows developers to introduce a new standardised derivatives contract into the Tracer meta-protocol. The Data Factory allows oracles & data providers to standardise various data streams, allowing them to be used as inputs within the Factory. Finally, the Factory automates market creation and allows anyone to use the produced market contracts within any application.

In a nutshell, Tracer is a derivatives contract communication protocol that uses various standardised templates to enable the automatic generation and distribution of new markets globally.

Meta-protocol ⊃ protocol

Curve allows for the permissionless creation of new token liquidity pools. Tracer allows the permissionless creation of any new derivatives market, given it has been installed into the meta-protocol. Tracer is a superset of all the existing blockchain-based protocols as it allows the creation of those protocols.

Sounds cool but so what?

Tracer is well-positioned to host a variety of financial product templates. Tracer enjoys both economies of scale and economies of scope. The more users Tracer has, the more efficient the Tracer products become. The more products in the Tracer suite, the more use-cases they have. For example, if Tracer installed an options template and a fixed-income template, we could produce various structured products using a new structured products template. The impact of a new product within the Tracer has exponential implications for the utility of the meta-protocol.

The utility of the Tracer Factory expands beyond that of creating new markets and new products within the Tracer ecosystem. For example, suppose you believe you are well-positioned to create a fantastic user experience for hedging inflation. In that case, you only need to build the front-end and plug it into the standardised and permissionlessly deployable Tracer contracts. Those who deploy new markets using the Tracer Factory capture part of the fees collected from those markets. Hence, Tracer allows the instant monetisation of new products without any work on the blockchain level.

Summa summarum

If you are a smart contract developer, develop in the Tracer suite. You’ll enjoy economies of scale and scope + get to leverage our community, reputation, and existing infrastructure.

If you are a financial engineer, tweak the parameters of existing Tracer products and start deploying new, more efficient markets using them.

If you are a front-end developer, deploy the product you’d like to see in the market using Tracer Factory, create a custom frontend for it and make a killing with a specialised, niche product. Then, focus on honing the UX and UI to make your product the best in the market.

If you are a marketing professional, deploy a new market with the Factory and sell your vision to the community.


  1. Abdullah, I. S., & Menascé, D. A. (2013). The Meta-Protocol framework. Journal of Systems and Software, 86(11), 2711–2724.