Globe, a crypto derivatives exchange that is launching in the coming weeks, has raised $3 million in a seed funding round.
The round was backed by Y Combinator, Pantera Capital, Tim Draper's Draper Dragon Fund, and Wavemaker Partners, among others.
With fresh capital at hand, Globe looks to launch its trading platform in the "next few weeks" and scale it from thereon. CEO James West told The Block that Globe is aimed at serving institutional customers with new products and a better trading experience.
West said Globe has been built with a proprietary order-matching and risk engine called Thor, which would "rival Nasdaq in terms of latency and throughput." But market experts have previously told The Block that speed is not a top priority for most traders. It is, instead, liquidity.
On that front, Globe plans to first attract institutional liquidity providers to its platform, said West. "We provide for them seamless integration and the usual riches of traditional futures exchanges like CME Group, the New York Stock Exchange, Japan Exchange Group, etc.," he said. "After that we are targeting the kinds of quantitative investment funds which now are thinking about a crypto desk or two, enabling them to make the kinds of trades they make in traditional markets."
Globe, registered in Seychelles and based in London, will not be available to U.S. residents.
'Coinbase for derivatives'?
West said, "you could call us Coinbase for derivatives," referring to Y Combinator's backing. Coinbase received backing from Y Combinator in 2012 and it is currently the venture firm's fifth-ranked investment by valuation.
Paul Veradittakit, partner at Pantera Capital, said there is a "wave of interest" in crypto assets from major banks, fintech companies, and portfolio managers, and Globe's platform and products have been built to meet their needs.
To start with, Globe would offer perpetual futures for bitcoin (BTC), ether (ETH), bitcoin volatility index (VIX), and decentralized finance (DeFi) tokens, with up to 100x leverage. All products are aimed at helping traders hedge their risk well and manage their wealth, said West.
Globe is launching at a time when there is an increased interest in the crypto space from traders and investors, and when the market is rallying. The crypto derivatives market is also breaking records. The aggregated open interest in bitcoin futures, for instance, has touched a new all-time high at around $6.30 billion, according to data tracked by The Block. Open interest is the value of outstanding derivative contracts that are yet to be settled, and its growth suggests that more money is flowing in the market.
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