Decentralized derivatives release platform received $5 million in financing, Pantera Capital and Ripple

According to Coindesk's October 2 report, a decentralization agreement aimed at eliminating intermediaries in the financial industry has received a $5 million seed round financing led by Pantera Capital.


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The purpose of the Vega Protocol is to enable people around the world to operate in derivatives (futures, swaps, options, etc.) markets that interact with each other and comply with regulatory requirements.

Other major investors including Rprple's Xpring, Hashed and KR1 also participated in the round of financing. Vega founder Barney Mannerings said participants bought an unnamed ERC-20 token to manage pledge and governance services on the blockchain. :

“We really saw the value in the network,” Mannerin said, predicting that the company would eventually hand over the work to a foundation.

Vega has not yet discussed what the token will be used to do or what rights it will receive. He continued: "We will announce some details about the pledge and verifier model in the next month or two."

Mannerin said the round will be used for the development of the software to achieve Vega's vision and support the creation of a new community of developers and potential users of the agreement.

Market is everywhere

Vega is a Layer 2 solution for trading derivatives in an unmanaged and secure manner. It is neither a decentralized exchange nor an independent company. The software it develops will allow others to build markets for assets that have time spans. Mannerin said:

“In terms of the complexity of the software, this is a very ambitious project. With derivatives, the transaction has a life cycle.”

For example, a trader can sell the right to purchase a given asset at a given price after six months. This requires monitoring prices, controlling leverage, and managing risk. This requires a lot of calculations. Mannerin said:

“The Ethereum network is not very good at compute-intensive operations. We can get 10 to 100 times the performance boost to run these calculations. It's very functional compared to the somewhat toy-like version created on the Ethereum virtual machine. powerful."

In the so-called second version, Vega will be able to comply with the rules of any particular country and verify that the user is indeed under the jurisdiction. In addition, the software will provide tools for creating a wider variety of derivatives. Mannerin said:

“For people, this will be an easy way, and virtually any derivative on the planet can be created through it.”

He really refers to any derivative product on the planet. From the entire product suite of the software it can be predicted that one day, real-world securities will be tokenized and traded on such exchanges. Mannerin said:

"If we think that only cryptocurrencies such as ICO and Bitcoin in the encryption field will use it, we will not do this."

Take a small export company as an example. Because it exports a large number of products, it definitely wants to hedge the currency risk of the target market countries. Mannerin believes that for small and medium-sized enterprises, such hedging may be too expensive and not worth doing in the current world.

Paul Veradittakit, a partner at Pantera Capital, also endorsed this view in a statement:

“The team’s vision for the financial future is to create a level playing field where everyone can participate. This vision is part of the blockchain spirit and represents what we are trying to achieve.”

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