DerivaDEX, a new decentralized exchange with a focus on derivatives, has officially come out of stealth mode with an impressive array of backers that includes Coinbase Ventures, Polychain Capital, Dragonfly Capital, Electric Capital, Compound’s strategy lead, Calvin Liu, and several others.
According to the announcement by the startup’s co-founder and CEO, Aditya Palepu, DerivaDEX has raised $2.7 million through two rounds of fundraising to build out an exchange platform designed to bring decentralized finance (DeFi) to institutional and retail traders. The startup’s DEX, which is being built on the Ethereum (ETH) blockchain, will leverage a “sane” liquidity-mining model that “puts control directly in the hands of users.”
To further the company’s goal of a decentralized on-chain derivatives exchange, DerivaDEX plans to introduce its own decentralized autonomous organization (DAO), which will drive protocol-level decision making. As well as a token, DerivaDEX Token (DDX), which will allow users to participate in the governance and operations of the exchange, much like Compound Token (COMP) or Maker (MKR) do for the respective protocols.
Interestingly, DerivaDEX has opted to use an open order book and forgo the typical automatic market makers (AMMs) found on many DeFi applications in favor of an off-chain matching engine, price feeds and liquidation operators. This will reportedly increase the speed and efficiency of on-chain settlement and allow the exchange to “synthetically represent any asset,” which sounds like the startup plane to dive into equities and other assets outside the cryptosphere.
To encourage early adopters, DerivaDEX is planning a “series of incentivized opportunities that will be made available for early partners, including testnet competitions, insurance mining, and other opportunities to earn DDX tokens pre-launch.”
DerivaDEX appears to be coming out the shadows at the right time. The total value locked in DeFi applications has surged in the last month as investors clamor to begin yield farming.
The DEX’s launch date is currently planned for Q3 of this year.
Disclaimer: This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.