Solana-based Convergence RFQ raises token round at valuation of $30 million

Convergence RFQ, a Solana SOL -7.25% -based trading platform under development, has raised $2.5 million in a pre-seed funding round.

The round was led by C² Ventures, with participation from Big Brain Holdings, Israel Blockchain Association, Auros Global and others, Convergence RFQ said Wednesday.

The startup started raising for the pre-seed round mid-last year and closed it in June this year, co-founder Uwe Cerron told The Block. It was a simple agreement for future token round at a fully diluted valuation of $30 million, Cerron said.

Convergence RFQ has set the "governance" token's ticker symbol as CVG.

What is Convergence RFQ?

Convergence RFQ is an on-chain crypto trading platform that will support both spot and derivatives.

RFQ, short for request for quote, is a method where buyers request price quotes from sellers. This method differs from the central limit order book approach used by centralized exchanges and the automated market maker method used by decentralized exchanges. In CLOB, buyers and sellers place orders at specific prices, and trades are executed when matching orders meet. AMM, on the other hand, is an algorithmic system that facilitates peer-to-peer trading by automatically adjusting asset prices in response to fluctuations in supply and demand.

RFQ helps resolve challenges posed by CLOB and AMM, such as slippage and front-running, according to Cerron, who said Convergence RFQ will have no slippage. RFQ, overall, can help market makers and trading desks provide competitive quotes and control their exposure before executing trades, according to Cerron.

RFQ "can provide a much more robust crossover between centralized exchange liquidity and decentralized pricing mechanisms to create a hybrid model that gets best execution for traders, via API," Deribit wrote in an article last year. "Simply put, RFQs are really freaking quality."

Convergence RFQ on Solana and Arbitrum

Convergence RFQ is currently building its platform on Solana and then wants to also support the Ethereum Layer 2 network Arbitrum, Cerron said. The platform is expected to launch early next month.

There are currently six people working for Convergence RFQ, and Cerron wants to add a few more people, particularly in the marketing and growth functions.