Through a combination of unique features Primex aims to democratize access to non-custodial margin trading
Primex Finance, a decentralized prime brokerage liquidity protocol for DEX-agnostic cross-margin trading, announced a $5.7 million seed round led by blockchain-focused investment firm CoinFund and Stratos Technologies, a multi-strategy venture capital firm. The raise also saw participation from HyperSphere, GoldenTree Asset Management, Wintermute, GSR, Ledgerprime, among other notable market participants and angel investors.
“In developing Primex, our mission is to unite the two biggest DeFi use cases: DEXs and lending, into a new ecosystem, as well as give access to margin trading in a truly decentralized way”
The introduction of DeFi has effectively broken down traditional barriers in finance, especially as it relates to restrictions on who can access financial markets. However, supporting non-custodial margin trading that is available to anyone still presents a challenge for the DeFi ecosystem. In traditional finance, KYC and related risk evaluation protocols protect margin lenders, but DeFi has no such equivalent. To address this problem, Primex Finance leverages decentralized lender liquidity in conjunction with a trader performance mechanism to provide advanced trader tooling and seamless integration with DEX smart contracts.
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Founded in June 2021, Primex’s main goal is to enable margin trading for DeFi participants while allowing them to earn interest. Through Primex, both traders and financial institutions alike have the opportunity to trade freely while tapping into an interest pool that’s backed by trading profits worldwide. Once lenders provide liquidity to special types of pools – credit buckets – they then receive interest and profit-based fees from deals performed through these buckets. Traders then access liquidity from the credit buckets to margin trade across various DEXs. Leveraging machine learning, Primex assigns each trader a score based on their efficiency to determine their risk level in a decentralized way, thus ensuring security and transparency for the protocol.
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“In developing Primex, our mission is to unite the two biggest DeFi use cases: DEXs and lending, into a new ecosystem, as well as give access to margin trading in a truly decentralized way,” said Dmitry Tolok, co-founder of Primex Finance. “As we continue rolling out the protocol in phases, our long-term goal is to have concepts pioneered by Primex bridge the gap between traditional financial services and DeFi, resulting in new opportunities within finance being open to everyone, regardless of social position, national origin, or present location.”
The funds raised will be used to progress product development ahead of Primex’s V1 launch later this year.
“In observing the challenges DeFi faces with fragmented liquidity across base layer ecosystems and an over-reliance on automated-market makers, Primex is building a protocol business to solve the technically complex cross-margin and interoperability requirements needed to advance the state of decentralized finance,” said Alex Felix, CIO of CoinFund. “CoinFund is thrilled to support the team as they build vital infrastructure for DeFi market participants.”
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