Thursday, July 18, 2024

Struct Finance, a decentralized (DeFi) blockchain-based platform for structured financial products, announced the completion of a $3.9 million seed round in a press release on Monday. The company said it will use the proceeds to develop, customize and invest in DeFi products.

Avalanche is one of many investors

Struct Finance is a protocol on Avalanche, although it is expected to scale to other EVM-compatible chains in the near future.

Struct Finance attracted 24 investors to participate in the financing round. The group includes several notable standouts, including Avalanche’s $200 million Blizzard fund.

The list of other investors includes: Antler, Assymetries Technologies, Arcanum Capital, Avalaunch, AVentures Dao, Bison Fund, Bixin Ventures, Double Peak, FBG Capital, Finality Capital Partners, Infinity Ventures Crypto, Keychain Capital, Lancer Capital, Lucidblue, MC Ventures, QCP Capital, SCC Investments, Skyvision Capital, Spark Digital, Wintermute, Woodstock, Zokyo and 0xVentures.

The company estimates the total market for structured products within the traditional financial universe at $ 7 trillion. The appetite of investors within the DeFi area is only just gaining traction, especially in the form of covered calls and puts with cash margin.

In its press release, Struct Finance pointed out existing challenges in creating attractive structured products on DeFi. In particular, parameters available for various derivative instruments are static and are set by protocol developers. Therefore, investors have no choice but to “take it or leave it”.

In addition, many protocols offering these instruments experience fragmented liquidity due to multiple maturity dates, which could ultimately lead to high slippage or changes in discount rates.

The plans of Struct Finance

Struct Finance said it will provide its new capital of $3.9 million to develop tools for institutions to customize their interest rate products. Investors can also put them together with options to construct structured products that better fit their unique profiles.

Galen Law-Kun, founding partner of Double Peak, commented on his investment as an investor as follows:

Struct Finance is our first DeFi investment in the AVAX ecosystem. We believe that through the leadership of Louis, Ersin and Miguel, Struct Finance will set the gold standard for smart contracts with templates. In this way, people can easily share their own structured financial products either on AVAX or various other ecosystems. The Double Peak Group is very pleased to be part of this journey to bring DeFi into the mainstream and support a multichain future for struct finance in the long term.

Candice Zhao, Managing Partner at Lancer Capital, also commented:

“Investors and institutions are constantly confronted with large fluctuations in returns and token prices or uncertainty and unquantification caused by overly complex derivatives protocols. Struct Finance brings structured financial products to DeFi and offers investors attractive and simplified stablecoin returns. I admire your team and believe that fixed income products will become the first choice for institutional investors.”