Website
Building on Canton

Capacity
Derivatives

OTC forwards, swaps, and structured products for the GPU compute market. Bringing transparent price discovery and hedging to AI infrastructure.

$200B+
GPU compute market with triple-digit growth
Volatile
40% H100 rental price swing in five months
Fragmented
Marketplace for institutional hedging
Joel Smalley · Co-Founder
Prepared for Denarii Labs · April 2026
The Problem

A $200B+ market with no financial infrastructure

GPU compute is the most important commodity of the AI era — yet it trades like crude oil before NYMEX. Bilateral contracts, opaque pricing, no hedging, no transparent forward curve. Enterprise buyers commit nine-figure annual budgets entirely unhedged.

Volatile
40% Price Increase

H100 one-year rental prices rose 40% in five months, from $1.70/hr to $2.35/hr. Enterprise buyers had no institutional venue to hedge this exposure.

In Demand
Capacity Sold Out

On-demand GPU capacity sold out across all types. Blackwell generation fully booked through late 2026. Marginal compute almost unobtainable.

Fragmented
Nascent Infrastructure

Three competing indices, very few transactions, and no integrated offering for index access, a trading venue, and settlement. No single participant has assembled all the pieces.

Every major commodity class developed derivatives within a decade of hitting $100B in annual trade. GPU compute crossed that threshold in 2024.

The Market

Natural hedgers on both sides

The same structure as crude oil in 1983: producers who want to lock in revenue, consumers who want to lock in costs, and speculative liquidity drawn by volatility.

Long Side — Consumers
  • Frontier AI labs (Anthropic ~$25B ARR, OpenAI, Mistral) — compute is their single largest input cost
  • Global 1000 enterprises deploying AI at scale — growing budgets, entirely unhedged
  • A 40% price spike hits gross margin directly with zero hedging tools available
Short Side — Producers
  • GPU cloud providers (CoreWeave, Lambda, specialist neoclouds) want to lock in forward revenue
  • Hyperscalers (AWS, Azure, GCP) — a liquid forward market lowers their cost of capital
  • Long-term offtakes currently generate 15–20% project IRRs for Neocloud providers
Speculative Liquidity
  • Commodity desks (Goldman Sachs, Morgan Stanley, Vitol, Trafigura) — natural flow participants
  • Prop trading firms (DRW, Jump Trading) already investing in the GPU index layer
  • Already understand flow commodities, Asian-style settlement, and industrial hedging

TAM: $200B+ GPU compute market growing at triple-digit rates. Derivatives markets typically reach 10–20x the underlying physical market value.

The Solution

OTC derivatives for GPU compute

Cash-settled forwards and swaps referencing published GPU benchmark indices. Voice-brokered initially — the same model that launched crude oil, natural gas, and power derivatives. Settlement fees paid in a native utility token on Canton.

Swaps
Fixed-for-Floating

Buyer locks in a fixed GPU-hour rate; seller pays floating index rate. The buyer's effective cost is fixed. The standard entry point in every commodity OTC market — energy, metals, agriculture all started here.

Forwards
Cash-Settled Contracts

Agreement to buy or sell GPU capacity at a fixed price on a future date. Cash-settled against the published benchmark index at expiry. One-year tenor as starting point — the segment showing fastest price sensitivity.

Asian-Style Monthly Settlement

Settlement on the arithmetic average of daily index values over the contract period — matching how compute is consumed as a continuous flow rather than at a single point. The most natural fit for the commodity.

Why Canton

The only settlement layer built for institutional derivatives

Public blockchains expose positions. Centralised exchanges lack programmability. Canton provides trade-level privacy and native financial contract modelling — the two requirements that no other infrastructure satisfies simultaneously.

Trade-Level Privacy

Positions, counterparties and trade sizes never exposed. No institutional participant will trade derivatives on a platform with public visibility. A regulatory and competitive prerequisite.

Daml Smart Contracts

Native financial contract lifecycle: creation, novation, exercise, settlement, margining — with the precision that ISDA documentation achieves in legal prose. Purpose-built for financial instruments.

Atomic Settlement

All legs of a transaction succeed or fail together, eliminating settlement risk. Essential as the market matures toward complex multi-leg structured products — options, capacity swaps, spread instruments.

Institutional Consortium

Goldman Sachs, BNP Paribas, Deloitte, Microsoft already on the network. Their compliance teams have pre-approved the infrastructure — a new Canton-based product activates existing institutional machinery.

Market Development

The proven commodity market sequence

From spot market to index to OTC forwards to exchange futures to options. This is how crude oil, natural gas, power, and interest rates all developed. GPU compute follows the same path.

Phase 1
Index

Partner with existing benchmarks — Silicon Data SDH100RT (Bloomberg, DRW/Jump-backed), SemiAnalysis GPU Pricing Index (9 GPU types, contract-market focus), Ornn OCPI (transaction data).

Phase 2
OTC on Canton

Voice-brokered forwards & swaps between known counterparties. Canton settlement with utility token for transaction fees. Cash-settled against published indices. This is what we are building.

Phase 3
Exchange Futures

Standardised, cash-settled monthly contracts once the OTC market establishes a reliable forward curve. CFTC/FCA regulated. Central clearing via established CCPs (LCH, CME, ICE).

Phase 4
Options & Structured

Capacity swaps, range accruals, GPU price floors for AI lab budget planning, compute-vs-power spread instruments. Investment banks engage as dealers. Revenue multiples increase.

Revenue model: transaction fees on each settlement, paid in native utility token. The OTC venue captures economics at every phase of market development.

Competitive Landscape

No one has assembled all four pieces

The market requires four elements: a benchmark index, OTC intermediation, settlement infrastructure, and capital markets distribution. No single participant has all four. Capacity Derivatives on Canton fills the gap.

PlayerIndexOTC TradingCantonDistribution
Ornn
$5.7M seed — indices + first swap, pursuing CFTC DCM licence
OneChronos / Auctionomics
$32M raised — combinatorial auction, proprietary opaque standardisation unit
Silicon Data
$4.7M from DRW + Jump — SDH100RT index on Bloomberg terminals
SemiAnalysis
GPU Pricing Index + API — 9 GPU types, 180K subscribers, contract-market focus
Capacity Derivatives
OTC brokerage on Canton — derivatives trading + quant + technical build
Capability present
Partial / partner
Not present
Team & Ask

Founding Team

Joel Smalley
Co-Founder — Product & Technology
  • A decade of institutional derivatives trading — Chemical Bank, Daiwa, JPMorgan, CIBC (Head of Global CB Arb ex-US), BGC Partners
  • Quantitative analyst (Tullett Prebon) and Managing Partner, Pricing Kernel — stochastic volatility and derivative pricing across equity, credit, FX, commodities
  • Managing Partner, Merx Securities — FSA-regulated inter-dealer brokerage. MBA Econometrics & Finance (Rotman), PgDip Quantitative Finance (London)
  • Full-stack technical founder — enterprise distributed ledger platforms (Supermoney, 6 years), tokenisation engines, AI orchestration
Mark Abbott
Co-Founder — Commercial
  • Co-Founder & CCO at Supermoney (9 years) — investor relations, business development, partner relationships across multinational corporations
  • Founded Cheam Insurance Brokers (25 years) — UHNW specialist, built to £100M+ gross written premiums, successful exit in 2018
  • CEO, Toucan Labs — fintech and DLT applications for payments, loyalty, and digital commerce
  • Contributor to Law Commission (UK) call for evidence on smart contracts. Oracle Partner Network, IBM Registered Business Partner
What We Seek From the Accelerator
  • Canton/Daml technical guidance — building the settlement infrastructure for OTC GPU compute derivatives directly in Daml
  • Introductions to Canton consortium participants — Goldman Sachs and BNP Paribas are natural early counterparties and liquidity providers
  • Tokenomics framework — designing the transaction fee utility token for Canton-settled derivatives
  • Network access to institutional participants already building financial products on Canton
capacityderivatives@rubytech.llc · linkedin.com/in/joelsmalley
Rubytech LLC · London, UK