DeFi protocol Struct Finance announced the closure of a $3.9 million seed round to develop the tools that will allow the ecosystem to customize, compose, and invest in decentralized structured products.
A total of twenty-four top name companies have taken part in the funding round for Struct Finance, as follows: Blizzard Fund (Avalanche’s 200 Million fund), Antler, Arcanum Capital, Assymetries Technologies, 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.
Struct Finance will use this fresh injection of capital to build out the tools for institutions to easily customize their interest rate products and compose them with options to construct structured products that are 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 (over $7 trillion in TradFi), and have recently started gaining traction in DeFi, predominantly in the form of covered calls and cash-margined puts.
Challenges in creating structured products on DeFi
Today, many of the parameters available on different derivative instruments are static in nature, predominantly set by protocol developers, 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 yet continue to utilize conservation functions that result 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, abstracts risk management and complex pricing away from its users while providing highly-competitive yields on various digital assets. The team is currently launching on Avalanche but intends to scale into other EVM compatible chains in the near future.
“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.” – Galen Law-Kun, Founding Partner – Double Peak
“As Defi goes to the next level, the market for derivatives will grow significantly in the future, and the Struct Finance team has the right products to fit the market needs. We are delighted to support this very promising team.” – Jingcheng Li, Managing Director at FBG Capital
“As crypto markets mature and DeFi takes root, the need for sophisticated instruments which 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 honour to be able to support them on their journey.” Mark Stanwyck, Co-Founder, Avalaunch.
“As new capital enters the market, the need for customized structured products will keep growing. Struct Finance is building the core pillars to enable creation of such customized structured products and we are impressed by Struct’s expertise to simplify complex on-chain transactions. We deeply believe Struct will be the go-to platform for all structured products on Avalanche and are thrilled to back the brilliant team.” – Himanshu Yadav, Founding Partner and CIO at Woodstock
“We are excited by the innovation taking place with Struct and its utility across the Avalanche. We at 0xVentures are deeply committed to power holistic evolution of the DeFi space. We are proud to be a part of the rapid growth of the protocol, and look forward at collaborating further in the near future.” – 0xVentures
“IVC is thrilled to support Struct Finance’s pioneering vision to introduce and institute structured products within the booming DeFi ecosystem.” Brian Lu, Founding Partner at IVC
“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.
Candice Zhao, Managing Partner at Lancer Capital
“Struct Finance makes creating a custom derivative on-chain easy, fast and cost effective. In the traditional financial system, the process for creating and listing a new derivative is very complex. Struct Finance’s roadmap on allowing investors to create their own structured product is very exciting for our institutional clients!” – Mustafa Yilham, Partner at Bixin Ventures
“Since Satoshi Nakamoto published his white paper on A Peer-To-Peer Electronic Cash System, the question has been how to make the crypto space safe for institutional fund managers, pension funds, and consumers to use. Struct Finance provides the key technology layer to finally allow investors to de-risk their crypto investment decisions while profiting from the promise of this (not-so) new asset class.” – S. Dean
“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 by 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” – Markus Bruderer, Partner, Antler
“As DeFi matures and scales, Struct Finance helps fill the gaps by supporting the demands of institutional and retail investors. By enabling the seamless customization of structured products, the platform will help accelerate mainstream adoption. Zokyp and Buidl Capital are happy to support Struct’s efforts to secure and simplify complex on-chain transactions.” Hartej Sawhney, CEO at Zokyo and Principal at Buidl Capital
“We decided to support Struct Finance because we feel they are creating a much needed cross-chain solution for both institutional and retail participants to launch their own structured products with fewer design limitations, allowing for more innovative investment products.” – Karthik Bupathi, Founding Partner – Arcanum Capital
“With the Defi markets developing, customized structured products will be flourishing. Struct Finance is building the core products to meet this growing demand. We are delighted to support this professional and brilliant team to build structured products on Avalanche.” Justin Huang, Founder of Asymmetries Technologies
“We are very excited to support Struct Finance, as they are filling a gap in Avalanche DeFi offerings by the instruments and tools that will enable structured products in that space. We believe the next wave of growth in DeFi will be from Options, Perpetuals and Structured Finance where Struct Finance will be a key protocol” – Tamer Ovutmen, Founder – AVentures DAO