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Vega, a provider of decentralized trading technology, has raised $5 million in a seed funding round led by Pantera Capital.
Xpring (Ripple), Hashed, NGC Ventures, gumi Cryptos Capital, Rockaway Blockchain, KR1, Eden Block, Focus Labs, Greenfield One, Monday Capital and RSK Ecosystem Fund also participated in the round.
Vega said that it aims to design and implement a protocol for safe and non-custodial decentralized margin trading. It said that its protocol design can transform the derivatives markets to run automatically over peer-to-peer networks with investment bank-grade risk management processes.
According to the Vega Protocol white paper:
“Vega is a protocol for the decentralised trading and execution of financial products. It is designed for fully automated, end-to-end margin trading on open public networks, secured with proof of stake.”
In its press release, Vega said that it is a layer-2 solution that will help avoid the performance and market fairness problems associated with decentralized markets built on layer-1 blockchains like Ethereum or Bitcoin. Its decentralized nature will help eliminate middlemen and enable global access to financial tools.
Barney Mannerings, founder and shareholder of Vega Holdings Limited, told CoinDesk:
“The ethereum network is not great at running computationally intensive…We can get 10 to 100-times better performance for doing those calculations,” adding that Vega is very powerful “compared to the slightly toylike version that can be created on the ethereum virtual machine.”
In addition to enabling a fully automated end-to-end trading system, Vega incentivizes market creators and market makers with significant rewards from fees paid by other participants for launching liquid markets, the release said.
Furthermore, Vega said it will offer a framework for creating and customizing products, giving freedom to every participant to build new financial instruments and markets.
“In Vega, we see a project with the potential to disrupt and transform the financial landscape with decentralized margined products. The team’s vision for the future of finance is a level playing field in which all people can participate. That vision is integral to the blockchain ethos and represents everything we are fighting to enact,” said Paul Veradittakit, Partner at Pantera Capital.
Mannerings said that the fresh funding will be used to build out the software and to establish a nascent community of developers and potential users of the protocol.
Currently, the Vega team is working to complete and test the first version of the core protocol. The first private test network demonstrating margin trading with test assets is expected to launch imminently, and soon expand into a publicly available testnet.
