Decentralized derivatives exchange SynFutures today announced the close of a $14 million Series A round of financing led by Polychain Capital with participation from Framework, Pantera Capital, Bybit, Wintermute, CMS, Kronos, and IOSG Ventures. The oversubscribed round follows a $1.4 million seed round raised in January 2021 from Standard Crypto and Dragonfly Capital—bringing SynFutures’ total funding to $15.4 million.
As the DeFi space continues to bring new users to the crypto ecosystem, decentralized exchanges (DEXs) have seen explosive growth this year, with decentralized spot exchanges like Uniswap reaching more than $1.6 billion in 24h trading volume. Inspired by this shift in DeFi, SynFutures focuses its platform on derivatives, which are financial instruments such as futures contracts or options based on the values of their underlying assets.
SynFutures aims to lower the entry barrier for investors that want to enter the derivatives market by giving them the tools to freely trade what and how they want, whether it be large-cap cryptocurrencies, altcoins, traditional equities, gold, indices, or any other asset they desire. SynFutures allows anyone to add arbitrary trading pairs with any maturity date and list their own futures contracts with just a few clicks.
“We’re aiming to level the playing field for the average investor by cultivating a free and open market for derivatives trading,” said Rachel Lin, founder and CEO at SynFutures. “We believe SynFutures will ultimately democratize the futures market by empowering users to trade anything at any time as we embark on this next era of accessibility in investing.”
Designed as an open and trustless derivatives market, SynFutures supports a large variety of assets, including ERC-20 tokens, cross-chain assets, and anything else with a price feed. Users can take leveraged long or short positions based on assets such as BTC, gold, hash rate, and real-world assets. To protect users’ positions and avoid unintended price volatility that is often seen in the cryptocurrency market, such as the manipulation of oracle index prices, SynFutures employs a rigid modeling and risk management system that introduces the best practices of traditional finance to the DeFi space. SynFutures also has an Automated Liquidator (ALQ) smart contract that performs liquidations automatically, enabling any user to use ALQ to trim undercollateralized positions.
“In traditional financial markets, derivatives trading volume far eclipses that of spot trading and we’re now seeing a similar shift in crypto, especially in centralized exchanges. As DEXs increasingly gain market share, we see a unique opportunity for SynFutures to become the leading futures marketplace of the decentralized economy,” said Olaf Carlson-Wee, Founder and CEO of Polychain Capital. “We look forward to supporting such a strong founding team with extensive experience spanning both traditional finance and blockchain technology, a rarity in the industry, as they bring synthetic derivatives to new users across the globe.”
SynFutures was developed by a team with an extensive background in both traditional and digital asset management. Prior to starting SynFutures, Lin was one of the founding partners of Matrixport, one of Asia’s largest digital asset neobanks, and ran structured derivatives sales at Deutsche Bank. Other founding members come from a diverse range of global financial institutions and blockchain technology companies such as Credit Suisse, Nomura Securities, Ant Financial, and Bitmain.
Coinciding with the new funding, SynFutures is onboarding users in closed alpha, with plans to open up its platform to all users next month as part of its mainnet launch. SynFutures is also planning to release a series of innovative new products aimed at providing users with a more robust trading experience, including Hash Rate Futures, the world’s first fully decentralized hash rate derivative allowing users to hedge or speculate on the mining difficulty of bitcoin; Auto-Hedger, a one-click solution for hedging the “impermanent loss” risk for staking in a variety of DeFi AMM trading platforms; and cross margining, a way of offsetting positions to spread and reduce margin requirements.