DeFi protocol Struct Finance has raised $3.9 million in seed capital. The round saw the participation of 24 VCs, including Avalanche’s Blizzard Fund, Antler, Arcanum Capital, Assymetries Technologies, Avalaunch, AVentures Dao, Wintermute, Bison Fund, Lucidblue, Bixin Ventures, Double Peak, Infinity Ventures Crypto, FBG Capital, Finality Capital Partners, Keychain Capital, Lancer Capital, MC Ventures, Spark Digital, QCP Capital, SCC Investments, Skyvision Capital, Woodstock, Zokyo, and 0xVentures.
The funds will go towards helping Struct Finance develop the tools to customize, develop, and invest in decentralized structured products. Because of this, institutions will be able to build interest rate products that are more precisely tailored to the needs of specific types of investors. Below is a breakdown of how Struct Finance has outlined its product offerings:
Structured products are a logical next step for the crypto sector, which has seen the introduction of derivatives. A variety of interest rate products, options, and other instruments are at play in this kind of assortment. It then constructs flexible investments that can adjust according to various diifferent risk profiles, market expectations, and asset classes. Essentially, Struct Finance wants to use structured products to leverage the growing popularity of derivatives in the crypto market.
Structured products have grown to a valuation of $7 trillion. There are signs that they have permeated into DeFi significantly, creating immense investment opportunities. However, various challenges remain in the market.
Many of the parameters offered on various derivative instruments are static at the moment, which puts investors at a disadvantage. Typically, protocol developers set the rules, and investors have no choice except to accept them. Because many derivatives platforms have variable maturity dates, they have fragmented liquidity. This leads to either substantial slippage or significant discount rate changes when there is little market depth and huge transaction volumes. Nonetheless, they keep using conservation functions.
“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”, stated Galen Law-Kun, Founding Partner – Double Peak. Representatives of other contributing VCs also lauded Struct Finance, stating that it would revolutionize DeFi in Avalanche and the wider market.
Built on Avalanche, Struct Finance has produced a slew of new investment options in the DeFi space. Essentially, it customizes interest rate instruments and alternatives from the DeFi ecosystem and uses different combinations to create greater financial products. Therefore, it results in variable levels of protection, abstract risk management, and complex pricing. Ultimately, the platform is on a mission to generate extremely competitive returns on different digital assets.
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