Pantera Capital Leads $5M Seed Round of Decentralized Derivatives Startup

Pantera Capital has led a $5 million strategic seed round of decentralized derivatives protocol Vega.

According to the announcement published on Oct. 3, the round included participants such as Ripple’s investment arm Xpring, Hashed, NGC Ventures, gumi Cryptos Capital, Rockaway Blockchain, KR1, Eden Block, Focus Labs, Greenfield One, Monday Capital, RSK Ecosystem Fund, alongside a group of unnamed private investors.

Against “profiteering, monitoring, and control” by privileged actors

Per the announcement, Vega is currently focused on designing and implementing its core protocol for secure and non-custodial decentralized margin trading. 

The software aims to disintermediate derivatives trading — in the company’s words, to eliminate the “rent-seeking middlemen endemic to traditional capital markets” and replace them with peer-to-peer mechanisms.

As a Layer-2 solution, the system will be designed differently than existing decentralized markets based on Layer-1 blockchains such as Bitcoin (BTC) and Ethereum (ETH). In a statement, Vega Holdings founder and shareholder Barney Mannerings emphasized:

“We support the right to collaborate and trade freely. Privileged institutions and gatekeepers have for too long kept the financial system rigid and rigged in their favour. It is neither desirable nor necessary for market participants to be subject to profiteering, monitoring, and control by those privileged institutions.”

Decentralizing finance

The core innovations of Vega’s software will reportedly include a fully automated end-to-end trading system designed to reduce operational overheads, rewards system for market creators and makers derived from fees paid by market participants and a trading-focused sidechain with purportedly 10–100x faster execution than general-purpose blockchain.

As Cointelegraph recently reported, Pantera has just participated in a $2.4 million seed round for decentralized finance startup InstaDApp, the developer of a mediator smart wallet layer that aims to reduce the cost of conducting financial transactions.

Ripple has also recently acquired payments platform Logos Network. As part of Xpring, the team behind Logos will be exploring a DeFi system that is set to leverage the XRP token.