Ostium – a company that enables users to trade off their assets directly on-chain – recently announced it raised $3.5 million in funding from General Catalyst and LocalGlobe, with participation from Susquehanna International Group (SIG), DeFi Alliance, Balaji Srinivasan, Shiliang Tang (LedgerPrime), and nearly 20 additional founders, investors, and advisors. This funding round will facilitate the launch of our flagship protocol, the first decentralized, non-custodial perpetual exchange for Real World Assets.
The company’s launch comes at a volatile time in the financial markets. There is unprecedented growth in the monetary base, bottlenecks in supply chains, and inflation hitting 40-year highs.
So, investors have been diversifying into various asset classes on-chain and off-chain. This includes niche alternatives like investable wines and fractional private equity.
“The market lacks a dedicated platform for trading Real World Assets in a format already familiar to DeFi power users, catering to the increasing demand for on-chain exposure to diversifying bets on macro beyond crypto,” said the company founders in a blog post. “We’re building to bridge this gap through the first decentralized perpetuals DEX purpose-engineered for Real World Assets, starting with commodities and FX. For the first time, both the market demand and technical infrastructure exist to enable these financial primitives. At a high level, the V1 of our flagship protocol is:
Stablecoin settled for both LPs and traders
Oracle-based, using Chainlink’s newly announced low-latency Data Streams
Margin enabled, with substantial leverage across asset classes
Designed to minimize LP directional risk, aided by our risk management partnership with Chaos Labs:
– Hyperbolic funding rates
– Skew-dependent opening fees
– Capital efficient counterparty pool
Unbiased and disintermediated:
– Fully on-chain settlement and matching (no off-chain sequencer)
– Outsourced triggering of automated orders using Chainlink Automations 2.0 (no in-house keeper system)
We’re thrilled to announce our public testnet rollout on Arbitrum this quarter and mainnet launch early next year, pending audits.”
The company founders met at Harvard University in a freshman economics class. And both of them worked briefly at Bridgewater Associates. The founders also first bonded over their shared experience competing in high-stakes environments, Marco Antonio as an International Physics and Math Olympiad medalist, and Kaledora Kiernan-Linn in a previous career as a professional ballerina with the Royal Danish Ballet. They started trading together across both DeFi and traditional markets in college.
The more time they spent trading, the more they became frustrated with the cost, friction, and the attention split needed to manage both on- and off-chain trades across asset classes.
“If blockchains are the future of financial infrastructure, why are traders using the blockchain for settlement limited to placing bets on crypto, rather than the full suite of assets they might want to trade? We envisioned Ostium to solve this problem and facilitate seamless on-chain diversification,” added the company founders. “Our shared love of macro and first-hand experience of the underserved and antiquated commodities markets in particular has been a key driving force behind our protocol vision from day one.”
Additional Quotes
“Blockchain-based networks are seeking to transform the core infrastructure of the financial world through reduced transaction costs, improved settlement times, and composability. We believe that new financial primitives like Ostium will contribute to the much-needed upgrade of the system for all financial assets. Ostium is focused on enabling a greater set of assets, beyond crypto-native tokens, to be traded on-chain from FX to commodities. We are excited to share in the company’s values and partner.”
— Nick van Eck, Partner, and Kyle Doherty, Managing Director at General Catalyst
“In the last century, we’ve seen vast growth in access to both financial and tangible assets. However, consumer access to and transparency in tangible assets still lags far behind, leading to reduced trading volumes and higher fees. We believe tangible, or “real-world” assets, are overdue for a technological upgrade. Blockchains are uniquely poised to facilitate this transition by enhancing transparency, facilitating fractionalization, and democratizing access. Ostium’s brilliant team and their ambition to become the leading on-chain platform for democratizing tangible asset investments resonates deeply with the foundational principles of web3. We’re thrilled about Ostium’s potential to cultivate access to a truly novel suite of on-chain assets and democratize consumer access to long underserved asset classes.”
— Ash Arora, Partner at LocalGlobe
