Y Combinator, Pantera join $3 million seed round for new crypto derivatives exchange Globe
Globe, a crypto derivatives exchange that is launching in the coming weeks, has raised $3 million in a seed funding round.
The round was backed by Y Combinator, Pantera Capital, Tim Draper’s Draper Dragon Fund, and Wavemaker Partners, among others.
With fresh capital at hand, Globe looks to launch its trading platform in the next few weeks and scale it thereon. CEO James West told The Block that Globe is aimed at serving institutional customers with new products and a better trading experience.
West said Globe has been built with a proprietary order-matching and risk engine called Thor, which would “rival Nasdaq in terms of latency and throughput.” Market experts have previously told The Block that speed is not a top priority for most traders. It is, instead, liquidity.
On that front, Globe plans to first attract institutional liquidity providers to its platform, said West. “We provide for them seamless integration and the usual riches of traditional futures exchanges like CME Group, the New York Stock Exchange, Japan Exchange Group, etc.,” said West. “After that we are targeting the kinds of quantitative investment funds which now are thinking about a crypto desk or two, enabling them to make the kinds of trades they make in traditional markets.”
Paul Veradittakit, partner at Pantera Capital, said the firm is seeing “a wave of interest” in crypto assets from major banks, fintech companies, and portfolio managers, and Globe’s platform and products have been built to meet their needs.
To start with, Globe would offer perpetual futures for bitcoin (BTC), ether (ETH), bitcoin volatility index (VIX), and decentralized finance (DeFi) tokens. All products are aimed at helping traders hedge their risk well and manage their wealth, said West.
Globe is launching at a time when there is an increased interest in the crypto space from traders and investors, and the market is rallying. The crypto derivatives market is also breaking records. The aggregated open interest in bitcoin futures, for instance, has touched a new all-time high at around $6.30 billion. Open interest is the value of outstanding derivative contracts that are yet to be settled, and its growth suggests that money is flowing in the market.
On the backing from Y Combinator especially, West said, “the last time Y Combinator backed a crypto exchange, it was Coinbase which turned out rather well, I guess you could call us Coinbase for derivatives.”
Globe, registered in Seychelles and based in London, will not be available to U.S. residents.
© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Yogita Khatri