DeFi protocol Struct Finance has announced the closure of a $3.9-million seed round to develop the tools to allow the ecosystem to customize, compose and invest in decentralized structured products.
Twenty-four top-name companies have participated in the funding round, including Blizzard Fund, Antler, Arcanum Capital, Asymetries Technologies, Avalaunch, AVentures Dao, Bison Fund, Bixin Ventures, Double Peak Group, FBG Capital, Finality Capital Partners, Infinity Ventures Crypto (IVC), Keychain Capital, Lancer Capital, Lucidblue Ventures, MC Capital Ventures, QCP Capital, SCC Investments, Skyvision Capital, Spark Digital, Wintermute, Woodstock, Zokyo and 0xVentures.
Struct Finance will use this fresh injection of capital to build the tools for institutions to easily customize interest rate products and compose them with options to construct structured products better-suited to the profiles of different investors.
Structured products utilize a permutation of different interest rate products, options and other financial instruments to construct investments that can be adapted to different risk profiles, market expectations and asset classes. With the emergence of derivatives in the crypto markets, structured products are a natural evolution for the space. These sophisticated products have been growing in popularity — more than $7 million in traditional finance — and have recently started gaining traction in decentralized finance (DeFi), predominantly in the form of covered calls and cash-margined puts.
Challenges in creating structured products in DeFi
Today, many of the parameters available on different derivative instruments are static in nature, predominantly set by protocol developers and leaving investors with no choice but to take it or leave it. Furthermore, many of the protocols offering these instruments experience fragmented liquidity as a result of having multiple maturity dates but continue to utilize conservation functions, resulting in either high slippage or considerable changes to discount rates if larger volumes are transacted under low market depth.
What is Struct Finance
Struct Finance further expands the spectrum of on-chain structured products by offering users a way to customize interest rate instruments and compose them with options available in the ecosystem to construct superior financial products. The platform opens up the number of investment choices available, enabling varying protection levels, abstracting risk management and complex pricing away from its users while providing highly competitive yields on various digital assets. The team is currently launching on the Avalanche network but intends to expand to other Ethereum Virtual Machine-compatible chains in the near future.
“As crypto markets mature and DeFi takes root, the need for sophisticated instruments that are capable of supporting the demands of institutional and retail investors becomes paramount. Struct not only offers this but also allows users to compose existing instruments together, opening an endless array of strategies. The team behind Struct has done nothing but build and execute around these novel concepts, and it’s an honor to be able to support them on their journey,” said Mark Stanwyck, co-founder of Avalaunch.
“IVC is thrilled to support Struct Finance’s pioneering vision to introduce and institute structured products within the booming DeFi ecosystem,” said Brian Lu, founding partner of IVC.
“The Struct Finance team met in the Antler Singapore program. Upon strong validation of their business idea, the team founded Struct Finance and received pre-seed funding from Antler. As the DeFi infrastructure evolves, there is a need for more flexible investment products. Struct Finance is addressing this with their innovative protocol layer for structured derivatives in DeFi,” said Markus Bruderer, partner of Antler.
For more updates, Struct Finance can be contacted via the following social media channels: