Decentralized Finance (DeFi) protocol firm Struct Finance has raised $3.9 million in a Seed funding round to develop the tools that will allow the ecosystem to customize, compose, and invest in decentralized structured products.
The new round was led by 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/
With this round of funding, Struct Finance says it will focus on building 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.
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.
What is Struct Finance
Founded by Louis Ng, Ersin Dalkali, and Miguel Depaz, Struct Finance 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.”
“IVC is thrilled to support Struct Finance’s pioneering vision to introduce and institute structured products within the booming DeFi ecosystem.” Brian Lu, Founding Partner at IVC.
“As Defi goes to the next level, the market for derivatives will grow significantly in the future, and the Struct Finance team has the right products to fit the market needs. We are delighted to support this very promising team.” — Jingcheng Li, Managing Director at FBG Capital