Struct Finance secures $3.9M for structured products in DeFiStruct Finance secures $3.9M for structured products in DeFi
DeFi protocol Struct Finance has announced the closure of a $3.9-million seed round to develop the tools to allow the ecosystem to customize, compose and invest in decentralized structured products.
Twenty-four top-name companies have participated in the funding round, including Blizzard Fund, Antler, Arcanum Capital, Asymetries Technologies, Avalaunch, AVentures Dao, Bison Fund, Bixin Ventures, Double Peak Group, FBG Capital, Finality Capital Partners, Infinity Ventures Crypto (IVC), Keychain Capital, Lancer Capital, Lucidblue Ventures, MC Capital Ventures, QCP Capital, SCC Investments, Skyvision Capital, Spark Digital, Wintermute, Woodstock, Zokyo and 0xVentures.
Struct Finance will use this fresh injection of capital to build the tools for institutions to easily customize interest rate products and compose them with options to construct structured products 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 — more than $7 million in traditional finance — and have recently started gaining traction in decentralized finance (DeFi), predominantly in the form of covered calls and cash-margined puts.
Challenges in creating structured products in DeFi
Today, many of the parameters available on different derivative instruments are static in nature, predominantly set by protocol developers and 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 but continue to utilize conservation functions, resulting in either high slippage or considerable changes to discount rates if larger volumes are transacted under low market depth.
What is Struct Finance
Struct Finance further expands the spectrum of on-chain structured products by offering users a way to customize interest rate instruments and compose them with options…….