Struct Finance, a decentralized (DeFi) blockchain-based platform for structured financial products, announced in a Monday press release the completion of a $3.9 million seed round. The company said it will use the proceeds to compose, customize, and invest in DeFi products.
Avalanche one of many investors
Struct Finance is a protocol on Avalanche although it expects to scale into other EVM compatible chains in the near-term.
Struct Finance tapped 24 investors to partake in the financing round. The group includes several notable standsouts, including Avalanche’s 200 Million Blizzard Fund.
The roster 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 structured products market within the traditional finance universe to be $7 trillion. Investor appetite within the DeFi space is only starting to gain traction, especially in the form of covered calls and cash-margined puts.
Struct Finance noted in its press release existing challenges in creating attractive structured products on DeFi. Specifically, parameters available on different derivative instruments are static and set by protocol developers. As such, investors have no choice but to “take it or leave it.”
Also, many protocols that offer these instruments experience fragmented liquidity due to multiple maturity dates that could ultimately end up in high slippage or changes to discount rates.
Struct Finance’s plans
Struct Finance said it will allocate its new $3.9 million in capital to build tools for institutions to customize their interest rate products. Investors can also compose them with options to construct structured products that better match their unique profiles.
Commenting on its participation as an investor, Double Peak Founding Partner Galen Law-Kun said:
“Struct Finance marks our first DeFi Investment into the AVAX Ecosystem. Through the leadership of Louis, Ersin and Miguel, we believe Struct Finance will set the gold standard of templated smart contracts. Thus, allowing people to easily release their own structured financial products either on AVAX or various other ecosystems. Double Peak Group is very excited to be a part of this journey in bringing mainstream adoption to DeFi and in the long term, support a multichain future for Struct Finance.”
Candice Zhao, the Managing Partner at Lancer Capital, also commented:
“Investors and institutions are forever faced with large swings in yields and token prices, or uncertainty and unquantification created by overly complex derivative protocols. Struct Finance is bringing structured financial products to DeFi, providing investors with attractive and simplified stablecoin yields. I am an admirer of their team, and I believe that fixed- income related products will become the first choice for institutional investors.