Institutional crypto derivatives provider Rails announced the launch of “Institutional-Grade Vaults” on the Stellar network on Tuesday, allowing brokerages, fintechs and other intermediaries to plug into crypto perpetuals via a single backend. The company aims for options trading in Q2 2026.
Satraj Bambra, CEO of Rails, told Cointelegraph that the core idea was to separate matching from money. “The critical difference is custody and verifiability,” he said.
Rails runs a centralized matching engine, while client assets will sit in audited smart contract vaults on Stellar. Every 30 seconds of profit and loss (PnL), fees and liabilities are committed onchain, as Merkle roots that institutions can independently reconcile against their own records.
Related: Crypto derivatives exchange Paradex reports outage, cancels open orders
Reducing counterparty risk
A core design claim is that vaults lower counterparty and operational risk by ring‑fencing client collateral from market-making capital and Rails’ own operating funds.
Bambra framed this as a direct response to prior exchange implosions, where assets sat in an omnibus account, and clients had to trust their internal ledger.
“If they fail, you become an unsecured creditor in bankruptcy,” he said. “This is exactly what happened to FTX customers.”
He said that the lesson here was clear: “Separate execution from custody,” and stressed that user funds remain in onchain smart contracts rather than on Rails’ balance sheet.
According to Bambra, the company decided on the Stellar network for its fast settlement finality and a decade of work with banks, remittance providers and tokenized asset platforms.
“When you are asking institutions to trust smart contracts holding tens of millions in capital, that heritage matters,” he said.
According to the announcement shared with Cointelegraph, the company has processed more than $3.4 billion in trading volume to date. It’s registered under the Cayman Islands Monetary Authority (CIMA), but Bambra told Cointelegraph that Rails had “begun its registration process” with the United States National Futures Association.
Related: Fenwick agrees to settle lawsuit alleging role in FTX collapse
Crypto derivatives hit $85.7T in annual volume
Derivatives have fast become crypto’s main venue for price discovery and risk transfer. CoinGlass’ 2025 annual report estimates derivatives trading volume at roughly $85.7 trillion last year, with average daily turnover of about $264.5 billion.
Those figures marked record volumes and deeper open interest as institutional traders used futures and options as their primary tools for price discovery and risk management.
Total crypto derivatives volume in 2025. Source: CoinGlass
The same report warns that higher complexity and deeper leverage chains have “elevated systemic tail risks,” with the Oct. 2025 deleveraging event exposing how fragile liquidation engines, auto-deleveraging (ADL) mechanisms and highly concentrated venues can still turn crowded positions into outsized losses across the market.
Magazine: Meet the onchain crypto detectives fighting crime better than the cops