Vega, a decentralized derivatives trading protocol, today announced it has closed a $5 million raise with investment from Arrington Capital, Cumberland DRW, and Coinbase Ventures
The rounds, led by Arrington Capital and Cumberland DRW, support Vega’s mission to democratize markets by enabling anyone to create and launch a derivatives market while tackling some of the challenges that plague decentralized systems and have prevented their widespread adoption.
By eliminating centralized gatekeepers and decentralizing governance, Vega allows for instant settlement (< 1 sec), removes the conflict of interest from markets, reduces fees, and enables the throughput (up to 10K TPS) necessary for high-volume derivatives trading.
“By allowing anyone to create and launch a derivatives market, we aim to give people the tools they need to hedge risks unique to their region, profession, or situation. Derivatives trading has been a pillar of traditional finance for a long time, but DeFi has not been able to achieve the capital efficiency and throughput required to make decentralized derivatives trading viable, until now. We are very appreciative to all those who contributed to our funding rounds, as this raise is pivotal to ensuring Vega continues towards mainnet launch as the first institutional-grade derivatives trading protocol.”
– Barney Mannerings, Founder of Vega
The protocol brings together over two years of engineering efforts and original academic research into on-chain derivatives. In addition to building a customized blockchain focused on performant and scalable trading, Vega presents a suite of innovations in areas including on-chain anti-frontrunning, liquidity incentives, active and passive market making, the CLOB and AMM dichotomy, as well as on-chain circuit breakers and decentralized risk management.
Vega launched its testnet in Q2 2020 and has had a number of iterations since. Concurrently, the team launched a Markets and Liquidity Programme in June 2020 with eight founding members joining as the protocol’s earliest institutional adopters. The upcoming Flamenco Tavern release will launch liquidity mining onto the TestNet, characterized by a unique blend between active and passive liquidity provision.
Vega is currently advancing towards its mainnet release with plans for enabling self-custodied cross-chain collateral, and building a trustless bridge into the Ethereum ecosystem. Future deployments will widen Vega’s scope into other major blockchains including Bitcoin, Polkadot, and Cosmos, driving toward Vega’s overarching mission to democratize derivatives infrastructure.
Other raise participants include ParaFi Capital, Signum Capital, CMT Digital, CMS Holdings, Three Commas, GSR, SevenX Ventures, and ZeePrime Capital. The DeFi Alliance also joined as an investor alongside Aave CEO & Founder Stani Kulechov, Enzyme Finance Founder Mona El Isa, Co-Founder and CEO of Terraform Labs (TFL) Do Kwon, and CEO and Co-Founder of Kyber Network Loi Luu. This round follows Vega’s seed round led by Pantera Capital completed in October 2019.