Futureswap has raised $ 12 million in venture capital from Framework Ventures, Ribbit Capital, and Placeholder.vc to launch an updated version of its Ethereum-based exchange.
The protocol, which is based on v3 from the leading Automated Market Maker (AMM) Uniswap, enables up to 30 times the leverage effect on any liquidity pool. “We’re very excited to add this layer as a new primitive,” CEO and co-founder Derek Alia told CoinDesk in an interview. “The amount of options now is very, very cool.”
Perpetuals are a crypto-innovation similar to futures, but with no expiration date, which allows users to make significant use of their bets on a specific cryptocurrency. While the vehicle is popular for giving traders access to oversized profits, so-called “perps” can also amplify losses, which is why they are viewed by many as very risky.
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The futures swap financing round comes as entrepreneurs and investors alike try to drive decentralized options trading. While options are widespread in traditional finance, they remain quite a niche in the world of decentralized finance (DeFi) – with the Perpetuals Exchange dYdX being a major exception.
“If you look at what’s going on at dYdX, they recently hit $ 1 billion in volume, making it one of the most successful crypto projects ever,” said Alia. “We believe that the probability is very high that we can achieve even higher volumes by using the existing ecosystem.”
Futureswap will initially run on Arbitrum, a low-fee network that stacks transactions before they are settled on the Ethereum blockchain.