Futureswap, a decentralized exchange for trading perpetual swaps, has raised $12 million in a new funding round.
Ribbit Capital, Framework Ventures, True Ventures, and Placeholder co-led the round, each investing $2 million, Futureswap co-founder Derek Alia told The Block. The rest of the amount was funded by other backers.
This is Ribbit Capital’s first investment in a decentralized exchange, according to Futureswap.
The funding round was secured via a token sale and it is Futureswap’s Series A funding, said Alia. The project has previously raised $1.6 million in two rounds, bringing its total funding to date to $13.6 million.
With fresh capital at hand, the exchange plans to expand its current team of eight and grow its platform, said Alia.
Futureswap has also launched a new test version of its platform (V4) on the Ethereum Layer 2 platform Arbitrum.
Futureswap enables trading in perpetual swaps, a type of derivatives contract. Perpetual swaps allow traders to go long or short on a crypto asset with leverage and no expiry date. Futureswap offers up to 30x leverage. The exchange first launched on Ethereum in April 2020. Its V3 testnet was short-lived, and now the V4 testnet is live to the public. The mainnet should launch later this week, said Alia.
Because perpetual swaps don’t have an expiry date like futures contracts, they follow a funding rates mechanism to balance the short and long positions. When the price of a perpetual swap exceeds the index price, longs pay shorts a fee to incentivize short sellers to enter the market or decrease the incentive to stay long (and vice-versa).
Futureswap says it has facilitated over $4.2 billion in trading volume since its launch.