Cypher, the expiratory futures protocol built on Solana, today announced it has raised $2.1 million in a seed round co-led by Sino Global Capital, SkyVision Capital, and Blockwall Capital.
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In 2020 alone, the gross market value of over-the-counter (OTC) derivatives was valued at $31.6T; however, many impactful nascent markets lack efficient trading exposure. Cypher is set to change that. With this new capital, the company will launch a protocol designed to bring never-before-seen access to global markets – something that will be made possible through a synthetic derivatives product akin to a futures contract. The first opportunity for expanded access will be in pre-public markets. With the close of this funding round, Cypher will allocate funds towards continuing to build a world-class team of developers and product managers as well as laying the groundwork for hyper-growth initiatives as it plans for its upcoming launch.
“Cypher’s goal is to build a framework that allows the community to create and trade markets on virtually anything they’d like to gain exposure to,” said James, one of Cypher’s core contributors. “We’re more than just a protocol – we’re a change agent making it possible for previously excluded parties to participate while simultaneously letting existing participants better define what they want to trade. In short, we’re making the un-tradable, tradable.”
Cypher aims to be the bridge between TradFi and DeFi, focusing on laying the groundwork for markets as varied as inflation derivatives and NFT futures that merge TradFi strategies with blockchain applications. Until now, the majority of cryptocurrency trading protocols have focused on spot trading, perpetual futures, and to some degree, options, but Cypher’s focus on futures-like products that have a defined settlement date is an anomaly in the web3 world. The ability to express timeframe-driven views on the market and deploy established trading strategies appeals to both institutions and retail, hedgers, and speculators.
“Cypher allows the community to access markets that have historically been reserved for private investors,” said Matthew Graham, CEO of Sino Global Capital. “Not only do we strongly support this vision, but we also have exceptional conviction that the Cypher team will deliver in a community-first way. We are, frankly, thrilled to be co-leading their round and working with them for many years to come.”
To date, the protocol has announced partnerships with Sacra, Lagoon, GenesysGo, Switchboard, and Serum. The Serum DEX and Solana blockchain are integral to facilitating an interactive market and combine to make the fastest, most efficient way to trade assets on a decentralized protocol.
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“Building our protocol on Serum gives us access to an orderbook that is the only true way to bring price discovery forward – you just can’t do that with an AMM,” said Barrett, core contributor at Cypher. “And, through the use of synthetic derivatives over-collateralized by stablecoin assets, Cypher removes the supply constraint of having physical underlying holdings that has kept liquidity and access low in the past.”
“DeFi isn’t “winner take all” – it’s an empowering, tech-first approach to finance that makes it possible for everyone to win together,” said Alex, core contributor at Cypher. “Our goal isn’t to replace our established trading systems. Instead, we want to offer new tools to enhance the experience of traditional players and simultaneously level the playing field for anyone new who wants to get involved. With DeFi, the opportunities for participation are endless, and Cypher is the keystone in the gate leading to a financial system that is fair and equitable for all.”
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