Futures Trading Security Based on Smart Contract Technology

Abstract

With the development of blockchain technology and the increasing vitality of the world economy, the use of blockchain technology is expanding in the financial field gradually. Among all the financial derivatives, futures with their high-risk, high-return investment pattern have been popular to global investors, but their risks from leverage always lead to a disaster. Currently, there is no reasonable or appropriate safety net measure available to protect investors’ losses within acceptable limits. However, smart contracts at the blockchain contract layer with their properties of security, automation and strict adherence to contract terms, naturally align with the nature of futures trading. Therefore, this paper designs three types of smart contracts in trading access, risk aversion assessment and safety net protection respectively, to provide tailored safeguards for investors while promoting futures trading developing healthily and maintaining investor enthusiasm at the same time.