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Thursday, October 19, 2023

Pantera Capital Leads $22 Million Investment in Derivatives Exchange SynFutures

SynFutures ↗, a Singapore-based decentralized exchange (DEX ↗) focused on perpetual futures, has just secured an impressive $22 million in its latest funding round.

The funding round, which pushes SynFutures’ total funding to $38 million, was spearheaded by Pantera Capital and also saw participation from SIG DT Investments, a subsidiary of the Susquehanna International Group (SIG DTI), as well as HashKey Capital.

Perpetual futures are a type of financial derivative commonly used in cryptocurrency and commodities trading. Unlike traditional futures contracts that have a specified maturity date, perpetual futures don’t have a fixed expiration date, continuing indefinitely, and can be traded with leverage, letting traders control a larger position than their initial capital would allow.

The fundraising announcement accompanies the unveiling of SynFutures’s V3 of its platform, with the mainnet release scheduled for the fourth quarter of 2023.

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The upgraded V3 platform incorporates an Oyster automated market maker (Oyster AMM), which is fully deployed on-chain.

According to SynFutures, an Oyster AMM combines attributes of orderbook and AMM models in a single approach, enhancing liquidity and capital efficiency in the realm of decentralized finance (DeFi ↗). Perhaps the largest and most well-known AMM on the market is Uniswap ↗. Orderbook models are essentially how centralized exchanges match buy and sell orders.

It enables permissionless listing of any trading pairs, including major crypto assets such as Bitcoin ↗ (BTC), stablecoins ↗ and major altcoins, NFTs ↗, as well as indices. Built on Polygon ↗—a blockchain network that boasts fast and cheap transactions—the protocol also ensures the presence of two-sided liquidity, which allows users to provide liquidity with just a single token of a trading pair.

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“Crypto’s readiness to meet the challenges of mainstream adoption hinges on DeFi’s ability to reinvigorate and fortify its derivatives ecosystem,” Rachel Lin, Co-founder and CEO of SynFutures told Decrypt. “SynFutures’ V3 is designed to ensure DeFi doesn’t languish behind its competitors in CeFi and TradFi, and to ensure DeFi can reach its full potential, opening the door for mainstream and institutional adoption.

Derivatives trading and DeFi

Discussing the role of derivatives trading, the SynFutures CEO said that while it’s a driving force behind substantial trading volumes in both TradFi and CeFi, often heavily outweighing spot trading, the existing derivatives infrastructure within DeFi would struggle to keep pace with the arrival of institutional trading outfits.

“While there is rising demand for DeFi after CEX’s debacles last year, DeFi has yet to bridge the yawning chasm separating it from institutional players who predominantly rely on derivatives in their financial strategies,” Lin told Decrypt.

Lin anticipates that the bull market—driven by geopolitical and macroeconomic factors as well as the Bitcoin halving ↗—will come around next year, but “institutions might nevertheless still find themselves unable to fully embrace DeFi due to this limited derivatives functionality.”

“Should the crypto markets experience an explosive surge, DeFi’s currently inadequate capital and liquidity efficiency would continue to hamper its ambitions,” she said.

To that end, SynFutures hopes that the V3 of its platform eventually “proves a tipping point” for the niche.

James Mackreides
James Mackreides
'Mac' is a short tempered former helicopter pilot , now a writer based in Sofia, Bulgaria. Loves dogs, the outdoors and staying far away from the ocean.

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