DeFi derivatives platform Avantis raises $4 million

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DeFi derivatives platform Avantis raises $4 million

Avantis Labs, a decentralized finance derivatives ecosystem, has raised $4 million in a seed funding round led by Pantera Capital, the company's co-founder and CEO, Sehaj Singh, exclusively told TechCrunch.

The round also included Modular Capital, Galaxy, Coinbase's Base Ecosystem Fund and Founders Fund. The money will be used to expand Avantis, a market-making and trading strategy that is constantly evolving and evolving.

Perpetuals are a type of derivative contract that allow traders to decide on the price of an asset without actually owning it, ensuring that they do not have an expiration date and can be held indefinitely.

Many DeFi perpetual protocols focus on trading cryptocurrencies, instead of traditional assets like forex or commodities. In recent months, the demand for real-world assets to link the traditional financial market to the DeFi world has been increased, leading to a surge in demand for further real-world assets.

But many RWAs that are available on-chain through DeFi protocols are available to accredited institutions, not everyday traders. Avantis will enable forex and commodities to be hedged and traded on-chain without the need for tokenization, which is a slow and expensive process, Singh said.

Avantis' trading engine is powered by Pyth and Chainlink, which are low-latency and aim to provide traders with better prices across centralized and decentralized financial markets. The platform is being developed on the OP Stack, a network of chains built using the OP Stack, and uses USDC stablecoins as a collateral for trades on its protocol.

Avantis' private testnet phase began in the third quarter of this year with initial offerings of bitcoin and ether perpetual trading on Base's blockchain. By the first quarter of 2024, it plans to roll out general access on Base's mainnet.

Its waitlist has about 90,000 applicants, but it began onboarding about 2,500 people this weekend, Singh said. It will not be operating in the United States or any OFAC-sanctioned countries unless it can get permission to operate as an exchange under a CFTC license, he said.

The token aims to enable institutions and retail investors to trade crypto and RWAs with up to 100x leverage on its decentralized exchange. It aims to give these traders and liquidity providers better DeFi derivative trading and market-making infrastructure as well as a capital-efficient composability that's scalable that's scalable, the company said in a statement.

Composability is a generally 'untapped' area by orderbook-based derivative protocols because they have minimal trading opportunities for non-crypto asset classes. The DeFi space has been limited to mainly crypto assets.

Avantis will be available on the mainnet with bitcoin and ether and three pairs for foreign exchange, the pound, JPY and the euro. Over time, it will add more cryptocurrencies and 'exotic forex pairs' like INR andUSD, and commodities like gold, silver and crude oil, Singh said.

Avantis has a longerhorizon to expand its protocols' capabilities beyond perpetual trading, and it plans to begin working on an options engine by mid next year.

Singh said he hoped to win the elections and that he would be able to take care of the family's future. Beyond that, Avantis' 'next frontier products' can range from 'on-chain casinos' to leverage vaults, he said.