As a fun experiment to learn ESI and what can be done with contracts as I am getting back into even after a decade, I was weighing out trying and do a basic futures exchange matching engine based on them.
I know this had been done as a proof of concept before about ten years ago. But then it was found that the market’s were just too thin, not enough economies of scope and scale possible to make an exchange viable versus OTC (meaning classic Over the Counter here) with any commodity as a securities product, even Tritanium. And I’d guess that is still the case. But has the market developed enough toward needing an exchange for price discovery (highly doubtful as this is baked into the market interface from what I see given “GET /market/prices/” existing), needing ways to distribute risk (possibly, or more desire to speculate and seek arbitrage using leverage and margin?), etc?
What is the viewpoint of the market needing/utilizing futures contracts, and an exchange, for distribution of risk? Or is it by its nature and technology need nothing but OtC as it is, given the high liquidity and access to information?