DeFi protocol Struct Finance announced the closure of a $3.9 million Seed round to develop the tools that will allow the ecosystem to customize, compose, and invest in decentralized structured products.
A total of twenty-four companies have taken part in the funding round for Struct Finance, as follows: Antler, Arcanum Capital, Assymetries Technologies, Avalaunch, AVentures Dao, Bison Fund, Bixin Ventures, Blizzard Fund, Double Peak, FBG Capital, Finality Capital Partners, Infinity Ventures Crypto, Keychain Capital, Lancer Capital, Lucidblue, MC Ventures, QCP Capital, SCC Investments, Skyvision Capital, Spark Digital, Wintermute, Woodstock, Zokyo, and 0xVentures, it said in a press statement.
What will funds be used for?
Struct Finance will use this fresh injection of capital to build out the tools for institutions to easily customize their interest rate products and compose them with options to construct structured products that are better suited to the profiles of different investors.
What are structured products?
Structured products utilize a permutation of different interest rate products, options, and other financial instruments to construct investments that can be adapted to different risk profiles, market expectations, and asset classes.
With the emergence of derivatives in the crypto markets, structured products are a natural evolution for the space. These sophisticated products have been growing in popularity (over $7 trillion in TradFi), and have recently started gaining traction in DeFi, predominantly in the form of covered calls and cash-margined puts.
Challenges in creating structured products on DeFi
Today, many of the parameters available on different derivative instruments are static in nature, predominantly set by protocol developers, leaving investors with no choice but to take it or leave it. Furthermore, many of the protocols offering these instruments experience fragmented liquidity as a result of having multiple maturity dates yet continue to utilize conservation functions that result in either high slippage or considerable changes to discount rates if larger volumes are transacted under low market depth, the statement added.
What is Struct Finance?
Struct Finance further expands the spectrum of on-chain structured products by offering users a way to customize interest rate instruments and compose them with options available in the ecosystem to construct superior financial products.
The platform opens up the number of investment choices available, enabling varying protection levels, abstracts risk management and complex pricing away from its users while providing highly-competitive yields on various digital assets. The team is currently launching on Avalanche but intends to scale into other EVM compatible chains in the near future.
Galen Law-Kun, Founding Partner – Double Peak, “Struct Finance marks our first DeFi Investment into the AVAX Ecosystem. Through the leadership of Louis, Ersin and Miguel, we believe Struct Finance will set the gold standard of templated smart contracts. Thus, allowing people to easily release their own structured financial products either on AVAX or various other ecosystems.”
Mark Stanwyck, Co-Founder, Avalaunch, “As crypto markets mature and DeFi takes root, the need for sophisticated instruments which are capable of supporting the demands of institutional and retail investors becomes paramount. Struct not only offers this, but also allows users to compose existing instruments together, opening an endless array of strategies.
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Published on: Tuesday, March 22, 2022, 10:54 AM IST