Despite this enormous size, the derivatives market is largely untapped on-chain. The reason is simple: DeFi lacks the clearing infrastructure needed for derivatives to function at scale.

This is where Pascal Protocol steps in — building a decentralized clearing layer designed to become the risk-management backbone for institutional and decentralized markets.

How Does Pascal Protocol Work?

Pascal grew out of a venture builder. Its seasoned founders had previously launched decentralized exchanges and other blockchain projects but recognized an untapped opportunity in derivatives.

At its core, Pascal enables risk clearing for futures and options by removing counterparty risk from centralized intermediaries and embedding it in transparent, auditable smart contracts.

Unlike traditional margin models that treat each position separately, Pascal’s risk engine evaluates the trader’s entire portfolio and calculates the minimum collateral needed. Only the required funds are locked, preventing excessive over-collateralization.

Clearing decisions are made by code, not intermediaries.

The first implementation of Pascal is Jetstream, a futures platform launched earlier this year. Jetstream allows users to trade more efficiently by margin-matching correlated positions. The platform also operates with a Hyperliquid-inspired incentives scheme, where trading volume is rewarded weekly with points convertible into JETS tokens in the future.

Built with Arbitrum Stylus

Clearing is not a simple swap. It requires complex collateral modeling, multi-state risk management, and precise execution. Solidity alone was not sufficient for Pascal’s institutional-grade requirements.

To solve this, the team turned to Arbitrum Stylus, combining Rust programming with EVM compatibility. This made it possible to design, test, and deploy advanced logic while staying within the Ethereum ecosystem.

“Thanks to Stylus, we can fully exploit the potential of Rust, WASM, and LLVM to create advanced and efficient smart contracts, all while preserving complete interoperability with the entire Ethereum ecosystem,” said Ivan Ivashchenko, CTO of Pascal Protocol.

Today, Pascal runs over 70 smart contracts on Arbitrum, with custom data structures, advanced serialization, and a full fuzz-testing framework to ensure robustness. None of this would have been possible without Stylus.

What’s Next for Pascal?

Arbitrum Stylus ensures Pascal can meet institutional standards while staying grounded in DeFi principles of transparency and decentralization.

Beyond Jetstream, Pascal is working with partners to launch benchmark interest rate derivatives, with more asset classes on the horizon — including metals, carbon markets, and energy products.

Pascal’s mission is clear: bring the capital efficiency and safety of clearing to DeFi, and unlock the world’s largest financial markets on-chain.

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