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Polkadot-based DeFi platform dTrade raises $6.4m in seed funding

Updated: Jul 25, 2024
Published: May 13, 2021
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Decentralized financial (DeFi) platform dTrade has raised $6.4 million and will use the funds to decentralize cryptocurrency derivatives trading.

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dTrade raises $6.4 million in seed funding

Derivatives are contracts that represent an agreement between two parties to buy or sell a digital asset at a pre-determined price and date in future. Decentralization is at the heart of cryptocurrencies. The market was created to shift power away from central authorities and put it in the hands of the people. However, centralized trading platforms have dominate the cryptocurrency space until now. Now, new companies are springing up to change that narrative.

DeFi platform dTrade has raised $6.4 million from a seed funding round. The seed funding was led by investors Three Arrows, DeFiance, Huobi and Polychain. Evidently, the firm wants to become the first derivatives exchange built on Polkadot. Polkadot is operated by a decentralized autonomous organization (DAO) which uses blockchain technology to offer a secure digital ledger that tracks financial interactions.

The platform wants to capture a slice of the crypto derivatives market. In effect, the cryptocurrency derivatives market is a multi-billion industry. Still, the derivative alternatives only captures a small portion of the market. Granted, it is heavily centralized at the moment.

Platforms like FTX and Binance process billions of dollars in derivatives volume daily. According to its press release, dTrade wants to play a bigger role in the market. It intends to remove custodial and counterparty risks from crypto derivatives trading. DTrade co-founder Nikodem Grzesiak revealed that most of the contracts are going through audits ahead of their official launch in June. The second version of the perpetual swap exchange is live on the Edgeware testnet. Indeed, dTrade will carry out the public testnet in a few months.

Decentralized platforms are miles behind the centralized exchanges

Grzesiak revealed that decentralized exchanges process less than 1,000th of the crypto derivatives market’s perpetual swap volumes. However, he is hopeful that dTrade’s perpetual swaps and options support can reduce the deficit.

“Ultimately, the thesis is that decentralized platforms are better at distributing value to the end-users, so there is simply a better value proposition for traders,” he added. Grzesiak assured the crypto space that dTrade will operate differently. He disclosed that holders of the protocol’s DET governance token would get to decide where to use the revenue generated by the platform. This contrasts with centralized exchanges where the funds flow to the management or the holding company behind the platforms.

dTrade will be available to traders in various parts of the world. However, it won’t be available to US traders due to the country’s regulatory stance on leveraged derivatives.

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