Maverick Raises $8M To Boost Decentralized Derivatives Trading

Image source: Maverick

The Maverick Protocol has gotten some serious backing from high profile venture capitalists today, exiting stealth with $8 million in a strategic round of funding. 

Pantera Capital led the round along with participation from a host of well known crypto market investors, including Altonomy, Circle Ventures, CMT Digital, Coral Ventures, Gemini Frontier Fund, GoldenTree Asset Management, Jump Crypto, LedgerPrime, Spartan Group, Taureon, and Tron Foundation. 

Maverick is building what it calls an “innovative permissionless derivatives protocol” that aims to meet the demand for more expansive derivatives trading options on decentralized exchanges. At present, investors can only trade major tokens on most DEXs, because even the biggest ones are limited to around 30 trading pairs or less. That compares to the hundreds of trading pairs available on centralized exchanges, and explains why they tend to dominate the derivatives market. 

Maverick believes the opportunity for a decentralized derivatives exchange is “enormous”, noting that derivatives account for just over 50% of all daily crypto trading volume. To meet that opportunity it has created a unique protocol that allows more inclusive, or open listing, of almost any cryptocurrency, including mid-cap tokens on perpetual markets, with users able to stake any ERC20 token as collateral. 

Maverick says its approach creates new opportunities, not only for traders but also liquidity providers. For traders, its proprietary Gaussian Automated Liquidity Placement (ALP) vAMM ensures more optimal placement of liquidity around the market price of each asset, resulting in lower slippage. Meanwhile LPs gain from not needing to worry about managing their collateral, meaning greater capital efficiency overall. 

Maverick co-founder and Chief Executive Alvin Xu said crypto traders place a lot of value on platforms that provide them with access to the latest assets. Maverick, he said, does this with markets created entirely by its community of users.

“Perpetual markets still lack the ability to quickly list new assets due to the intensive work required to spin up a sustainable market,” Xu added. “With Maverick, we are here to change that paradigm by leveraging ALP.” 

Besides helping to create decentralized derivatives markets, Maverick said its passive staking mechanism could well be used to build other kinds of DeFi applications in future. 

Joey Krug of Pantera Capital said DeFi is crying out for derivatives based on mid-cap and long-tail assets, and that Maverick is well placed to meet that demand. 

“Its innovative market structure is poised to capture a significant chunk of the market by offering low slippage to traders and low-maintenance, capital-efficient staking to LPs,” Krug said. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.